Lease something semi-quick or buy older and faster?

[Efbe]

Brett99 said:

Sorry, not intentionally evading. Key criteria is fast and practical. 5 doors is a must. Sub 6.5 0-60. Max budget is £350 a month, including deposit. So my choice is either spend that on a lease and as others have pointed out, have hassle free motoring....or...I opt for something older and cheaper in terms of up front or monthly costs, but understand that I’ll spend more on fuel and maintenance.
My mileage is low at 6-8k a year.

Ok, then at such low mileage I wouldn't even think about mpg. It will have pretty much no impact on what you get.

two options then. Buy, or lease.

With no upfront cash, £350 a month over 2 years is 8.5k, with interest, lets say 8k.
So if you wanted to buy used and end up with a car you own (that will be worth around £5k to trade in/sell on) you would need to be looking at a 10 year old car. something like a bmw 330i.
5dr will limit you quite a bit as many of the faster hot-hatches are 3dr only IIRC.

Over to someone else on what you can lease thats a few years old already.

[culpz]

Efbe said:

culpz said:

Err, no. The leaser is the one laughing, as they've managed to have a brand new car on their drive, that cost them less than the car's depreciation over the 2 years, with no worries on between other than keeping up the monthly payments and maybe a couple of services.

As this thread isn't going anywhere, may as well derail slightly...

You wouldn't have a brand new car on the drive, it would still be a mile+/day+ old

Leasing is also based on the depreciation of the car. If you find a car to lease for less than the depreciation then you are one very lucky person, but that company is about to go bust! And yes I do get they are buying the car initially for cheaper than you could... but buy a car a year old and the savings they are making will pale into insignificance of what you would save.
As we see in this thread, the OP hasn't even stated a year old, could be new, 5, 10, 50. who knows.
However leasing can work out better than buying new. But not buying at 1y+.

If I am wrong, don't argue, just show me.

That's pedantry at it's finest right there. So, what you're essentially saying is that brand new cars don't exist?

I've just shown, you. OP has just shown you. £6800 over 2 years for brand new compared to a 15-20k bank loan for the 3 year old car. If the latter is "laughing to the bank", then you must have some serious number issues.

The reason that you're doing the old new vs old debate is that you're categorically stating that new cars aren't real.

[Efbe]

culpz said:

That's pedantry at it's finest right there. So, what you're essentially saying is that brand new cars don't exist?

I've just shown, you. OP has just shown you. £6800 over 2 years for brand new compared to a 15-20k bank loan for the 3 year old car. If the latter is "laughing to the bank", then you must have some serious number issues.

The reason that you're doing the old new vs old debate is that you're categorically stating that new cars aren't real.

if you want those specific numbers, then...

Person 1 leases a brand new car for £350 a month.
Person 2 takes a loan for £16.5k and buy a 3 year old car. pay back £350 a month for 5 years. (10% Loan... for a 2.5% loan, get a car worth £20k and walk away with 15k)
After 5 years car might sell for £12k.

Person 1 has 3 years newer car initially, and 6 years newer car after 3 years, but loses everything they have paid in.
Person 2 walks away with 12k after 5 years, but has to put up with an older car.

New vs old is a pointless argument if you purely talk money. There is no way it can ever make sense, so I have no idea why you would try to argue it.
The only reason for getting a new car is either as a company car which works out well in tax, or because you want something brand new... which is a completely okay argument. I wouldn't buy a used phone/tv/clothes etc, though financially it would be more sensible.

Edited by Efbe on Thursday 26th April 12:08

Edited by Efbe on Thursday 26th April 12:08

[Funk]

Brett99 said:

Funk said:

Efbe said:

Brett99 said:

I’m not someone to get hung up on the whole issue of whether I actually own the car. Ultimately I get to drive it. Someone owning it doesn’t get an enhanced experience vs leasing. For me it’s whats the most cost effective way to own the car.
The Golf gti dsg lease will cost me just 6800 over the 2 years. A quick look at Autotrader shows me that the car is already selling at 6k less than the new price. With 8 months of my term left I’ll therefore be quids in vs someone who purchased at the same time.

maybe, but someone that bought it at a year older would be laughing all the way to the bank.

And you're then comparing a new car and a used car which aren't the same thing.

Honestly, this has been done to death many, many times on PH - let's not do it again.

Before starting this I did take a look to see if there was a thread within the forum discussing this but I couldn’t see one.

It's ok - I was talking to efbe, not you OP.

There are loads of '...but you could buy this used car for less than leasing that new car...' type arguments which are pointless as they're comparing apples and oranges. Leasing new suits some people and buying outright year-old used suits others. They're different things though and not comparable.

As an aside, I was in your situation but the other way round - I had an '04 E46 330Ci which was costing me a lot to repair (not even the expected consumables, we're talking stuff breaking which isn't a normal wear-and-tear expense like brake pads, shocks). When I factored in depreciation to the costs it rinsed me nearly £4k in the the year I had it I decided that if I were paying that anyway I'd rather drive something better for the privilege so I'm leasing a Golf R for 2 years. It's fully-maintained (the extra monthly cost was a no-brainer at £7!) so I never have to worry about anything breaking, replacing tyres, servicing, MOTs or even tax. Many will say it's 'throwing money away' but I was throwing it away anyway on a 14 year old 330Ci and it's nice not playing the 'what's that new puddle' or 'why is the engine cutting out again' games.

I may not lease every time but for now I like knowing that my costs are fixed, there'll be no unexpected issues and I'm driving something far, far nicer than I was. Should something go wrong, the lease company will step in and sort it all for me.

Efbe said:

culpz said:

That's pedantry at it's finest right there. So, what you're essentially saying is that brand new cars don't exist?

I've just shown, you. OP has just shown you. £6800 over 2 years for brand new compared to a 15-20k bank loan for the 3 year old car. If the latter is "laughing to the bank", then you must have some serious number issues.

The reason that you're doing the old new vs old debate is that you're categorically stating that new cars aren't real.

if you want those specific numbers, then...

Person 1 leases a brand new car for £350 a month.
Person 2 takes a loan for £16.5k and buy a 3 year old car. pay back £350 a month for 5 years.
After 5 years car might sell for £12k.

Person 1 has 3 years newer car initially, and 6 years newer car after 3 years, but loses everything they have paid in.
Person 2 walks away with 12k after 5 years, but has to put up with an older car.

New vs old is a pointless argument if you purely talk money. There is no way it can ever make sense, so I have no idea why you would try to argue it.
The only reason for getting a new car is either as a company car which works out well in tax, or because you want something brand new... which is a completely okay argument. I wouldn't buy a used phone/tv/clothes etc, though financially it would be more sensible.

Ideally you should only ever buy an appreciating asset, you lease or rent depreciating ones. I think you're also smoking crack if you think that you'll buy a £16.5k car, drive it for 5 years and sell it for £12k - you might get £10k if you're very lucky, probably less. And you have the maintenance costs of a by-then 8 year old car, say perhaps £1k/yr (tax and MOT alone on something interesting will be £600/yr). So £5k for running costs over 5 years plus the £2k you've over-estimated on the sale value and your 'Person 2' is already £7k worse off over the 5 years than you've allowed for, compared with the person leasing...

In my situation the costs worked out around the same over the course of the year - except in your scenario as 'Person 1' I've paid a lump sum up front to buy the car as well as then taking the hit on depreciation and maintenance. And I'm in a 14-year-old 330Ci.

Now I'll 'lose' the same money over the course of the year (well actually a little bit more) but in this scenario I'm driving a brand new, much MUCH better car with no hassle and no unexpected costs.

Edited by Funk on Thursday 26th April 12:25

[Efbe]

Funk said:

snip.

I completely agree.
For me there is an age of cars that I find a bit to buy at. the 1year-3 year period, in which you still see huge depreciation, don't get to customise the car yourself and often have to compromise on specs, might not get as good warranty/support and can't find the best leasing deals.

When you look at older cars, maintenance does become an issue. A poor choice will leave you in a bad situation financially.

For me personally, my 11 year old Alfa is starting to cost too much to fix (who would have thought, an alfa that breaks!), so I will need to work out what to do next. It's a new company car, or a replacement used car at around 5 years old.

But without OP clarification on what they want, whats the point of PH if you don't argue randomly about pointless st.

[culpz]

Efbe said:

culpz said:

That's pedantry at it's finest right there. So, what you're essentially saying is that brand new cars don't exist?

I've just shown, you. OP has just shown you. £6800 over 2 years for brand new compared to a 15-20k bank loan for the 3 year old car. If the latter is "laughing to the bank", then you must have some serious number issues.

The reason that you're doing the old new vs old debate is that you're categorically stating that new cars aren't real.

if you want those specific numbers, then...

Person 1 leases a brand new car for £350 a month.
Person 2 takes a loan for £16.5k and buy a 3 year old car. pay back £350 a month for 5 years. (10% Loan... for a 2.5% loan, get a car worth £20k and walk away with 15k)
After 5 years car might sell for £12k.

Person 1 has 3 years newer car initially, and 6 years newer car after 3 years, but loses everything they have paid in.
Person 2 walks away with 12k after 5 years, but has to put up with an older car.

New vs old is a pointless argument if you purely talk money. There is no way it can ever make sense, so I have no idea why you would try to argue it.
The only reason for getting a new car is either as a company car which works out well in tax, or because you want something brand new... which is a completely okay argument. I wouldn't buy a used phone/tv/clothes etc, though financially it would be more sensible.

I agree, but it was you that was bringing up new vs old in the first place. Comparing apples with oranges is part of the issue.

I was merely countering your claim that person 2 is "laughing all the way to the bank", which doesn't add up whatsoever. Buying brand new with cash, i can see your point. Leasing/pcp'ing under a good deal, not so much.

I'd recommend reading the best lease deals thread on here. You'd be very surprised at some of the bargains that have been had over the years.

[Brett99]

Efbe said:

culpz said:

That's pedantry at it's finest right there. So, what you're essentially saying is that brand new cars don't exist?

I've just shown, you. OP has just shown you. £6800 over 2 years for brand new compared to a 15-20k bank loan for the 3 year old car. If the latter is "laughing to the bank", then you must have some serious number issues.

The reason that you're doing the old new vs old debate is that you're categorically stating that new cars aren't real.

if you want those specific numbers, then...

I don’t agree with your calculations. Continuing my example of paying £6800 for a golf gti dsg nav over 2 yrs...
Cost of car new is circa £27.5k
Avg price of 2 year old version of same car advertised car on Auto Trader with FSH is

Person 1 leases a brand new car for £350 a month.
Person 2 takes a loan for £16.5k and buy a 3 year old car. pay back £350 a month for 5 years. (10% Loan... for a 2.5% loan, get a car worth £20k and walk away with 15k)
After 5 years car might sell for £12k.

Person 1 has 3 years newer car initially, and 6 years newer car after 3 years, but loses everything they have paid in.
Person 2 walks away with 12k after 5 years, but has to put up with an older car.

New vs old is a pointless argument if you purely talk money. There is no way it can ever make sense, so I have no idea why you would try to argue it.
The only reason for getting a new car is either as a company car which works out well in tax, or because you want something brand new... which is a completely okay argument. I wouldn't buy a used phone/tv/clothes etc, though financially it would be more sensible.

Edited by Efbe on Thursday 26th April 12:08

Edited by Efbe on Thursday 26th April 12:08

I would question your figures if we use my current Golf gti lease deal cost of £6800 over two years.
Cost of car new to buy is around £27k
2 year old versions are going on Autotrader now for 20k. And they are dealers not private, so the owner would have likely sold to them for 18-19k. Lease deals include car tax, Therefore the costing around Of owning for the two year period would be around £8.5k. This example would seem to show that leasing in this case is definitely the winner over buying the car new and owning for the same two year period.

Now let’s look at your example of buying at 3 years old.
The cheapest 3 year old Golf gti (same spec as mine) is on AT for £17750. £1250 more than your example. If I then keep that car for 5 years as you suggest, I would then sell it at 8 years old for around £10k based on current 8 year old versions on AT. Therefore costing around £8k for 5 years. Not the £5k you calculated. Plus the uncertainty of maintenance, MOTs and road tax costs over 5 years. Adding up the greater initial cost and lower sale price at the end, I would be £3250 worse off than your calculations.

I agree that buying the used 3 year car would be overall the cheaper option, but would I rather personally be paying more and getting some piece of mind than driving round in an 8 year old car and all that comes with it. Therefore I think I have just answered my own original question in the post!

[Integroo]

Efbe said:

As this thread isn't going anywhere, may as well derail slightly...

You wouldn't have a brand new car on the drive, it would still be a mile+/day+ old

Leasing is also based on the depreciation of the car. If you find a car to lease for less than the depreciation then you are one very lucky person, but that company is about to go bust! And yes I do get they are buying the car initially for cheaper than you could... but buy a car a year old and the savings they are making will pale into insignificance of what you would save.
As we see in this thread, the OP hasn't even stated a year old, could be new, 5, 10, 50. who knows.
However leasing can work out better than buying new. But not buying at 1y+.

If I am wrong, don't argue, just show me.

I am PCPing a 2018 Fiat 124 Spider. OTR 15.5k due to a 5.3k manufacturers deposit contribution. 0% APR. Two years. 250 down 214pcm so 224 amortized. 2693 a year.

A nearly new example is 17-18k ish. A two year old example is 14.5kish. Would either of those have been more sensible to purchase with an interest bearing 4 year loan of c330-410pcm?

Sure I could buy an older car. I did. 6k Type R on a 2 year loan at 265pcm. It cost me 2500 to run in six months. Sure, I bought a bad example, but that's the risk you take.

My brother bought a 21 yo mx5 for 1750 and it rusted to bits before it was sold for 200 a year later. Couple of repairs but nothing major and it cost him c.1800 to run for a year. 900 more to run a brand new car? (And the sums could have been different if he had a major mechanical fault in that time).

I will probably buy an older car for my next one. But pcp/lease can be really good for certain people in certain circumstances

[ayman82]

I'm in the same predicament. Golf R cost £6.4k over two years, I've ordered an S4 to replace it, but thought that a B7 RS4 would be a good substitute or a C5 RS6. Can get them for around the same amount that I'll be paying over two years. Albeit pretty leggy. Not sure what to do.

[Brett99]

ayman82 said:

I'm in the same predicament. Golf R cost £6.4k over two years, I've ordered an S4 to replace it, but thought that a B7 RS4 would be a good substitute or a C5 RS6. Can get them for around the same amount that I'll be paying over two years. Albeit pretty leggy. Not sure what to do.

And that my exact problem! I could get an RS4 for say, 15k. Run it for 3years and it’ll probably be worth 12k still. Maybe more as I’ll be doing low mileage. It’s the unknown of the costs of anything major goes wrong that putting me off.

[Efbe]

Brett99 said:

I agree that buying the used 3 year car would be overall the cheaper option, but would I rather personally be paying more and getting some piece of mind than driving round in an 8 year old car and all that comes with it. Therefore I think I have just answered my own original question in the post!

Great.
That's exactly what it comes down to really, specific scenarios and cars.

In my experience, buying used only works well when you own a car for a longer term. selling/trading in is usually a massive PITA and buying used is a lottery. Whilst buying used can save you an absolute fortune, it only works on the right age/model.


On another note, my now quite old Ford has a running cost of around £300 a year with a depreciation at around £-85 a month so it's 15-20mpg is offset by £720 free motoring per year.
Financially I am quids in

[Funk]

Brett99 said:

And that my exact problem! I could get an RS4 for say, 15k. Run it for 3years and it’ll probably be worth 12k still. Maybe more as I’ll be doing low mileage. It’s the unknown of the costs of anything major goes wrong that putting me off.

And the issue with modern cars is that now things are a) hugely more complex to diagnose and b) hugely more costly to fix as nothing's designed to be dismantled and repaired, just 'replaced'.

I did a dumb thing the other night in my car and managed to break the mirror glass in the sun visor. Can I replace the £1-worth of mirror in the visor? No, of course not - it's £107 for a whole new visor. My MD had the same with his RRS gearbox; Land Rover said it was broken and 'couldn't be repaired as it was a sealed unit'. Then they wanted £11k for a new one. As it was a major expense he went looking and found someone who said they could repair it (still £4k though!) even though LR said it couldn't be done. Guess which option he took...?

Thinking about it, I almost had the same with my personal laptop - it's about 4 years old but was £1k new back then. It's had an SSD upgrade and flies along (i7, 12Gb RAM etc). The battery stopped holding a charge and I was struggling to find a replacement one for it - it's the typical 'make it a unique fit/shape/connector' approach from the manufacturer (HP). I work for an IT company and thankfully one of my suppliers came up trumps after a LONG search and the laptop will be good for several more years I'm sure. There was certainly nothing else about it that would've required me to replace it. Newer laptops don't even have removable/replaceable batteries any more so a failure like that would mean it goes to the tip in most cases...

Things need to be designed to be repaired more easily - it's less wasteful and better value.

[ayman82]

Brett99 said:

And that my exact problem! I could get an RS4 for say, 15k. Run it for 3years and it’ll probably be worth 12k still. Maybe more as I’ll be doing low mileage. It’s the unknown of the costs of anything major goes wrong that putting me off.

I think it's the fact that the initial deal we both have got, although, mine was slightly better and current deals seem a lot, lot more expensive than the deals we got. The S4 is coming out at £11k with some options, virtual Cockpit and metallic paint (which I wouldn't have gone for on the golf). I'd love an RS4/6, but not sure if I will cope if there are any sudden costs that could appear at any time...

[duff]

OP, I'm in a similar position - my Golf GTi lease finishes in January. Whilst it was a great deal (£200pm all in) and it's very nice with all the modern touches, I'm already looking at other cars as it is pretty boring and has no character. My wife used to have a Mini Cooper S and I often chose to take that over the Golf as you didn't need to drive it fast to be enjoyable, partly down to the exhaust popping at fairly low speeds - the Golf is so quiet and the fake noise just irritating!

We have a Q5 which we use all the time and I do 50 miles a week in the Golf. I'm thinking of selling the Q5 and leasing a Tiguan and using the money that'll free up to buy an older car with some character like a Mk5 R32 or slightly newer 3.0 S5 or V8 M3. It's going to cost more to run but if you buy the right car depreciation is minimal (we sold the Cooper S for a profit after 1 year).

I'd also add there are not many good deals around at the moment anyway, the Golf is currently around £350pm iirc.

[Funk]

duff said:

I'd also add there are not many good deals around at the moment anyway, the Golf is currently around £350pm iirc.

Golf Rs are knocking about from ~£270/mo...

[duff]

Funk said:

Golf Rs are knocking about from ~£270/mo...

I assume that’s not including deposit? NVS have them for that price but with a £3200 initial.

[Toed64]

Funk said:

Brett99 said:

Funk said:

Efbe said:

Brett99 said:

...
Ideally you should only ever buy an appreciating asset, you lease or rent depreciating ones. I think you're also smoking crack if you think that you'll buy a £16.5k car, drive it for 5 years and sell it for £12k - you might get £10k if you're very lucky, probably less. And you have the maintenance costs of a by-then 8 year old car, say perhaps £1k/yr (tax and MOT alone on something interesting will be £600/yr). So £5k for running costs over 5 years plus the £2k you've over-estimated on the sale value and your 'Person 2' is already £7k worse off over the 5 years than you've allowed for, compared with the person leasing...
...

Edited by Funk on Thursday 26th April 12:25

Funk, I think that the finance companies would totally agree that you should be renting their depreciating assets.

Renting assets can be very cost effective if you run a business and can offset the costs against tax. However, you still have to earn the money to offset things against the tax owed. Private individuals, employed rather than self-employed or business owners, generally cannot offset the costs of their motoring against tax, so it's normally a cost out of net income. If you need a car, want a new one and don't have the cash to pay for it outright, then how you finance it is complicated decision process...but renting isn't necessarily the cheapest option for paye employed people.

Years ago, I made the decsion to return all of our fleet vehicles at the end of their contracts and pay allowances instead. Now we have one company minibus and that's owned outright. One or two of our people make £hundreds every month from the mileage allowance we pay, one drives a tidy 11yo Merc, the other a 9yo Subaru. Depreciation is not really a big thing on older cars. Everyone is happy.

I repeat, if you choose the used car and spec carefully, buy at the right price and know what you are doing mechanically, you don't have to haemorrhage money. You don't have to buy into the smoke and mirrors opinions expressed by the main dealers to justify their £135/hr (BMW) labour costs.

The numbers I quoted were 100% accurate, except that I would have lost a tad less had I not paid a generous bung to the motor trader that advertised my car and handled the sale for me. I paid £16700 for my 135i in 2012 and it sold for £12750 2 months ago. I could have sold it for a bit more, but I wanted it gone.

BTW, the tax was £290 and an MOT is about £45...my car never failed. Repairs: 3 ARB drop links, 6 coil packs and a water pump/stat in 5 1/2 years. 2 sets of front pads, 1 set of rears & 1 pair of front discs during my ownership. I had to fit a few pairs of back tyres - about 1 pair per year @ £110 each and 2 pairs of front tyres - so with a major service every year, maintenance and repairs probably cost about £500 per year (after the service pack ran out at 5 years old, less beforehand).

I've never tried crack...have you?

Edited by Toed64 on Saturday 28th April 10:48

Edited by Toed64 on Saturday 28th April 10:50

[duff]

Toed64 said:

I've never tried crack...have you?

No need to get silly about this. Every deal is different, there’s no way I’d be able to run a new Golf GTI for 2 years for under £5k if I purchased it. My old 330ci never missed a beat in 40k miles but still averaged £130pm so I was happy to pay an extra £70pm for a brand new car. Your car cost you around £1500 per year and you were fairly lucky as you could very easily have got stung for big bills (HPFP, water pump, injectors)

I quite agree that it’s probably cheaper to run an old car however most are prepared to pay a premium for not spending a Saturday morning at the local tyre fitters or trawling the internet for solutions to that misfire. How much of a premium is up to the individual.

Btw, that “bung” you paid to a dealer was commission for providing a service.

[Spidersleg]

Lease a leon cupra. End of thread.

[Toed64]

duff said:

Toed64 said:

I've never tried crack...have you?

No need to get silly about this. Every deal is different, there’s no way I’d be able to run a new Golf GTI for 2 years for under £5k if I purchased it. My old 330ci never missed a beat in 40k miles but still averaged £130pm so I was happy to pay an extra £70pm for a brand new car. Your car cost you around £1500 per year and you were fairly lucky as you could very easily have got stung for big bills (HPFP, water pump, injectors)

I quite agree that it’s probably cheaper to run an old car however most are prepared to pay a premium for not spending a Saturday morning at the local tyre fitters or trawling the internet for solutions to that misfire. How much of a premium is up to the individual.

Btw, that “bung” you paid to a dealer was commission for providing a service.

Agreed - sorry if I was facetious, but I was being acused of fibbing.

The N55 does not suffer the HPFP problems of the earlier twin turbo, but the water pump did fail. BMW wanted £1200 to fix it, but I paid my favourite local garage under £500 to do the same job. The coil packs died and were replaced and BMW redesigned the injectors on the N55, so they are more reliable and only £60 each if they fail - rather than £200+ each for the earlier car.

The 'bung' was a personal thank-you on top of the agreed commission.