RE: PH Service History: To lease or not to lease
Discussion
Gribs said:
Is splashing out £6k over 2 years really cheap for a second car? £6k would buy a 5 year old focus and if kept for 5 years you'd be looking at roughly £1k a year depreciation and under £1k a year in maintenance/servicing.
You'd also be rolling a 5 year old Focus at the start and 10 years old at the end. You'll easily spend a couple of hundred a year on servicing, MOT and breakdown cover. Then road fund on top of that so say £500ish a year before you get a bill chucked at you, or tyres/brakes. Already you're not a million miles away from a years lease and you're still in a 5-10 year old Focus which may or may not breakdown and present you with a bill for a couple of grand.
I cannot think of a more thought out, poorly written lazy article.
Not useful in the slightest with zero information about the true differences between leasing and buying.
Both buying out right and leasing have major advantages and disadvantages, but have you covered them? No.
I was lucky to lease a C63 Coupe for 2 years with £1.8k down and £600 per month, with the only cost to me being fuel, tyres and an oil service. It was epic and worth every penny. Could I have bought one and run it for similar costs, no, not with a comprehensive warranty.
If you are a low mileage purchaser and are comfortable to cover potentially large repair bills or pay a lot for an extended dealer warranty buying outright / cash loan purchase can be very sensible. However, it's pretty rare for people to pay £20k+ cash for a used car without some kind of financing. 95% of new cars are now bought with finance.
Not useful in the slightest with zero information about the true differences between leasing and buying.
Both buying out right and leasing have major advantages and disadvantages, but have you covered them? No.
I was lucky to lease a C63 Coupe for 2 years with £1.8k down and £600 per month, with the only cost to me being fuel, tyres and an oil service. It was epic and worth every penny. Could I have bought one and run it for similar costs, no, not with a comprehensive warranty.
If you are a low mileage purchaser and are comfortable to cover potentially large repair bills or pay a lot for an extended dealer warranty buying outright / cash loan purchase can be very sensible. However, it's pretty rare for people to pay £20k+ cash for a used car without some kind of financing. 95% of new cars are now bought with finance.
HardtopManual said:
Sorry PH, but this article is stupid. You cannot compare the cost of leasing a new car with buying a used one. Personally, I'd never run a brand new car - leased or bought outright; it's always going to cost more than a privately-bought used car,
Is it though?Some of these cars the lease cost over two years looks less than deprecation on a 3 yr old un for 2 years
You have to choose the right model and wait for the deal though.
HardtopManual said:
Sorry PH, but this article is stupid. You cannot compare the cost of leasing a new car with buying a used one. Personally, I'd never run a brand new car - leased or bought outright; it's always going to cost more than a privately-bought used car, and I don't see any value in having a brand new car vs a used one.
The more valid comparison would be leasing costs plus hand-back charges vs outright purchase and sale after n years. But I suppose that would require a bit more research than adding up some lease numbers and a quick browse of the classifieds.
It's not news that used cars are cheaper than new ones. Leasing has nothing to do with that rather simple equation.
That's not wholly true.The more valid comparison would be leasing costs plus hand-back charges vs outright purchase and sale after n years. But I suppose that would require a bit more research than adding up some lease numbers and a quick browse of the classifieds.
It's not news that used cars are cheaper than new ones. Leasing has nothing to do with that rather simple equation.
Plenty of verified cases on PH where, for example, leasing a brandnew ~£40k Audi for 2 years has been thousands of Pounds cheaper than buying outright a second-hand BMW for ~£20k and selling it on after 2 years.
Not to mention the psychological benefits of a full warranty with a brandnew car. You can rag it to the red-line every minute of every day and know someone else will pick up the bill if the engine goes pop.
Very lazy.
Lets take the M4 for example.
Depreciation say 2000 a year if you don't use it much (not a daly driver)
Interest say 2000 a year conservative estiamte.
Service/repair - lest say 1000 a year to cover all contingencies.
Thats 5000 a year over three year - 150000
I am pretty sure you could negotiate the lease down a big amount if you are lucky.
So - not so far apart as it seems - paying almost the same for a 10 year old car as a new one.
Does that make sense?
Lets take the M4 for example.
Depreciation say 2000 a year if you don't use it much (not a daly driver)
Interest say 2000 a year conservative estiamte.
Service/repair - lest say 1000 a year to cover all contingencies.
Thats 5000 a year over three year - 150000
I am pretty sure you could negotiate the lease down a big amount if you are lucky.
So - not so far apart as it seems - paying almost the same for a 10 year old car as a new one.
Does that make sense?
Yipper said:
That's not wholly true.
Plenty of verified cases on PH where, for example, leasing a brandnew ~£40k Audi for 2 years has been thousands of Pounds cheaper than buying outright a second-hand BMW for ~£20k and selling it on after 2 years.
Not to mention the psychological benefits of a full warranty with a brandnew car. You can rag it to the red-line every minute of every day and know someone else will pick up the bill if the engine goes pop.
Plenty of verified cases on PH where, for example, leasing a brandnew ~£40k Audi for 2 years has been thousands of Pounds cheaper than buying outright a second-hand BMW for ~£20k and selling it on after 2 years.
Not to mention the psychological benefits of a full warranty with a brandnew car. You can rag it to the red-line every minute of every day and know someone else will pick up the bill if the engine goes pop.
tom scott said:
Very lazy.
Lets take the M4 for example.
Depreciation say 2000 a year if you don't use it much (not a daly driver)
Interest say 2000 a year conservative estiamte.
Service/repair - lest say 1000 a year to cover all contingencies.
Thats 5000 a year over three year - 150000
I am pretty sure you could negotiate the lease down a big amount if you are lucky.
So - not so far apart as it seems - paying almost the same for a 10 year old car as a new one.
Does that make sense?
I'm glad you don't do my accounts Lets take the M4 for example.
Depreciation say 2000 a year if you don't use it much (not a daly driver)
Interest say 2000 a year conservative estiamte.
Service/repair - lest say 1000 a year to cover all contingencies.
Thats 5000 a year over three year - 150000
I am pretty sure you could negotiate the lease down a big amount if you are lucky.
So - not so far apart as it seems - paying almost the same for a 10 year old car as a new one.
Does that make sense?
tom scott said:
Very lazy.
Lets take the M4 for example.
Depreciation say 2000 a year if you don't use it much (not a daly driver)
To add real life experiences - trading my stolen/recovered/unrecorded E92 M3 - £2000/month would be more accurate. Can you imagine what it would be if the theft and repaired had shown on an HPI check?Lets take the M4 for example.
Depreciation say 2000 a year if you don't use it much (not a daly driver)
And that was with a £15000 discount on the new price!
tom scott said:
Very lazy.
Lets take the M4 for example.
Depreciation say 2000 a year if you don't use it much (not a daly driver)
Interest say 2000 a year conservative estiamte.
Service/repair - lest say 1000 a year to cover all contingencies.
Thats 5000 a year over three year - 150000
I am pretty sure you could negotiate the lease down a big amount if you are lucky.
So - not so far apart as it seems - paying almost the same for a 10 year old car as a new one.
Does that make sense?
If you can find an M4 which loses just £2k per annum I suspect your subsequent discoveries will be world peace, Lord Lucan and the elixir of life ! Lets take the M4 for example.
Depreciation say 2000 a year if you don't use it much (not a daly driver)
Interest say 2000 a year conservative estiamte.
Service/repair - lest say 1000 a year to cover all contingencies.
Thats 5000 a year over three year - 150000
I am pretty sure you could negotiate the lease down a big amount if you are lucky.
So - not so far apart as it seems - paying almost the same for a 10 year old car as a new one.
Does that make sense?
Wills2 said:
We don't need another stupid thread about leasing and pcps, it has been done to death.
Don't you read your own forum?
You do realize how this site works? It's paid for by display advertising so every set of eyeballs and click makes the site money. Doesn't matter what we talk about so long as we are using the site. What better way to get people talking than a thread about leasing?Don't you read your own forum?
Anyway, back on topic - if you have to rent rent your car, you are a peasant and don't deserve to be behind the wheel. Leasing is a mug's game.
Leasing is a mug's game.
Er no, it isn’t.
On EVERY lease car I’ve had I’ve come out ahead financially, compared to should I have bought it.
Buying makes sense in a lot of cases such as a) get a banger, run it into the ground b) buy an appreciating modern classic c) get a zeitgeist car you can flip having ran it for a short period d) buy some unobtanium like RS Porsche’s or special Ferrari’s or even e) buy something ordinary and keep it for a very long time. In this way they will cost very little over the ownership period, or make money.
But, and it’s a big but, for “normal” cars leasing 9 times out of 10 will work out better on what is a vastly depreciating asset.
I’ve just collected a VW Areton for the OH with a list price of 35K.
My lease costs just shy of 7000 to run it for 2 years.
VW are already advertising minimal mile pre registered cars for around 26/27k.
On those figures I will well be ahead of the depreciation curve.
I think it was Warren Buffet who said if it “flies, floats, f*cks, or rent it”, on the assumption they would cost him money in the long run. Add “drive” to the list, in the majority of cases.
In addition comparing a brand new car, RFL included, under warranty isn’t quite in the same ball park as a 2nd hand motor which will come with, more limited protection should it go wrong.
Leasing may not be for everyone but for those who change cars every few years it’s always worked out for me.
Best one I’ve had recently is a Citroen cactus (again for OH), £1k down 23 x £42. Work the depreciation out on that.
I was paying considerably more than £42 per month for the teenager’s school bus pass!
Er no, it isn’t.
On EVERY lease car I’ve had I’ve come out ahead financially, compared to should I have bought it.
Buying makes sense in a lot of cases such as a) get a banger, run it into the ground b) buy an appreciating modern classic c) get a zeitgeist car you can flip having ran it for a short period d) buy some unobtanium like RS Porsche’s or special Ferrari’s or even e) buy something ordinary and keep it for a very long time. In this way they will cost very little over the ownership period, or make money.
But, and it’s a big but, for “normal” cars leasing 9 times out of 10 will work out better on what is a vastly depreciating asset.
I’ve just collected a VW Areton for the OH with a list price of 35K.
My lease costs just shy of 7000 to run it for 2 years.
VW are already advertising minimal mile pre registered cars for around 26/27k.
On those figures I will well be ahead of the depreciation curve.
I think it was Warren Buffet who said if it “flies, floats, f*cks, or rent it”, on the assumption they would cost him money in the long run. Add “drive” to the list, in the majority of cases.
In addition comparing a brand new car, RFL included, under warranty isn’t quite in the same ball park as a 2nd hand motor which will come with, more limited protection should it go wrong.
Leasing may not be for everyone but for those who change cars every few years it’s always worked out for me.
Best one I’ve had recently is a Citroen cactus (again for OH), £1k down 23 x £42. Work the depreciation out on that.
I was paying considerably more than £42 per month for the teenager’s school bus pass!
Edited by Gmlgml on Sunday 21st January 16:54
Edited by Gmlgml on Sunday 21st January 16:58
Yipper said:
Plenty of verified cases on PH where, for example, leasing a brandnew ~£40k Audi for 2 years has been thousands of Pounds cheaper than buying outright a second-hand BMW for ~£20k and selling it on after 2 years.
There will always be exceptions - and an Audi isn't a BMW - but I suspect there is a rather limited set of circumstances where this is the case - a nearly new, low miles, highly optioned car bought at top dollar from a dealer and sold back to the dealer just out of warranty, for example. I'd be interested to see some proper analysis though, of the total cost of owning a given model from new to 2 years or new to 3 vs 1-2, 2-3, 3-5, 5-7 etc. PH aren't going to do that though.I am the only one wondering why all the fuss about this article. To me it's simply comparing the outlay on leasing a new car against spending the same amount buying an older equivalent. There may be some inaccuracies in the amounts quoted but the thrust of the the argument is not anti-leasing but proposing an alternative. As usual any thread that uses the headline lease brings out all the tired maths with people rushing to defend their financing decision either way. In essence the comparison is closer to leasing new vs "not-quite-so-new" bangernomics.
HardtopManual said:
There will always be exceptions - and an Audi isn't a BMW - but I suspect there is a rather limited set of circumstances where this is the case - a nearly new, low miles, highly optioned car bought at top dollar from a dealer and sold back to the dealer just out of warranty, for example. I'd be interested to see some proper analysis though, of the total cost of owning a given model from new to 2 years or new to 3 vs 1-2, 2-3, 3-5, 5-7 etc. PH aren't going to do that though.
I did the exercise a few months ago while bored. All things being equal the new leased Tiguan worked out the same as a 2-4 but cheaper than 0-2 and still a bit cheaper than 0-4. This is one example so it may well worked out differently for other cars. For new volume cars with average cash discounts, 0.8% to 1% of the discounted cash price per month on a lease seems to almost guarantee to beat cash.Example : Audi A4 Avant at £32k, £27k cash - if you pay less than £270 amortised then that should do the trick vs cash.
This has been done to death and there will be folks on both side of the argument trying to argue for/against simply to justify what they did.
In my experience, most people who lease do so in order to punch above their weight in terms of car purchases and end up even poorer as a result. I never buy new. Always 2-3 years old with full manufacturer's warranty (including extended warranty at the expense of the dealer). The amount of negotiating power you have when buying cash is absolutely enormous - comical levels of discounts (especially if you buy at the right times - e.g. quarter or year-end). No lease/finance deals have been able to match my cash car purchases.
In my experience, most people who lease do so in order to punch above their weight in terms of car purchases and end up even poorer as a result. I never buy new. Always 2-3 years old with full manufacturer's warranty (including extended warranty at the expense of the dealer). The amount of negotiating power you have when buying cash is absolutely enormous - comical levels of discounts (especially if you buy at the right times - e.g. quarter or year-end). No lease/finance deals have been able to match my cash car purchases.
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