Leasing a car. My take on it.
Discussion
Eighteen months ago I needed a new car, having sold my three year old Zafira Tourer that I had from new.
I really needed an estate car or a people carrier, definitely a hatchback, I like larger cars and I sometimes need one for carting stuff about.
I settled on a new Mazda 6 Auto estate, in that smart red colour (Soul Red), the price was £26,000, (give or take), now I could have gone out and bought it outright, but figured after three years it would be worth around £12,000, therefore a depreciation loss of around £14,000, less any discount I might have negotiated.
I decided to go down the PCH route, £900 down, and around £310pm on a three year deal (An auto more expensive). I am 100% happy with the car, it is lovely, and I accept it is going to cost me around £11,000 in total when I hand it back (unmarked hopefully).
The way I look at it is, I have the use of a brand new car, nobody else has driven it, full makers warranty during my "ownership", so no unexpected bills, other than maybe front tyres maybe early next year, and no road tax to find.
I'm no worse off than if I'd have bought it, I've not had to lay £20,000 plus out and I don't have the hassle of trying to sell it on in eighteen months time.
Yes, I know I could have bought a decent four year old car for (say) 6k, and sold it for around 3k after three years, total cost £3k against £11k, but it would not have been a shiny new vehicle, and I could have been hit by a fairly hefty repair bill...(Gearbox etc)
Having lost a small fortune in depreciation over the last 40 years, changing cars every two or three years, is it better to think of a car like an "object" such as a fridge or washing machine?
So to sum up, it will have cost me me just over £10 per day (peanuts really) to have the use of a nice new reliable car, but maybe some might consider it 11k "down the drain".
(All figures approximate)
Opinions.....
I really needed an estate car or a people carrier, definitely a hatchback, I like larger cars and I sometimes need one for carting stuff about.
I settled on a new Mazda 6 Auto estate, in that smart red colour (Soul Red), the price was £26,000, (give or take), now I could have gone out and bought it outright, but figured after three years it would be worth around £12,000, therefore a depreciation loss of around £14,000, less any discount I might have negotiated.
I decided to go down the PCH route, £900 down, and around £310pm on a three year deal (An auto more expensive). I am 100% happy with the car, it is lovely, and I accept it is going to cost me around £11,000 in total when I hand it back (unmarked hopefully).
The way I look at it is, I have the use of a brand new car, nobody else has driven it, full makers warranty during my "ownership", so no unexpected bills, other than maybe front tyres maybe early next year, and no road tax to find.
I'm no worse off than if I'd have bought it, I've not had to lay £20,000 plus out and I don't have the hassle of trying to sell it on in eighteen months time.
Yes, I know I could have bought a decent four year old car for (say) 6k, and sold it for around 3k after three years, total cost £3k against £11k, but it would not have been a shiny new vehicle, and I could have been hit by a fairly hefty repair bill...(Gearbox etc)
Having lost a small fortune in depreciation over the last 40 years, changing cars every two or three years, is it better to think of a car like an "object" such as a fridge or washing machine?
So to sum up, it will have cost me me just over £10 per day (peanuts really) to have the use of a nice new reliable car, but maybe some might consider it 11k "down the drain".
(All figures approximate)
Opinions.....
Prohibiting said:
My opinion.... I'd have gone for the £6k outright option and saved myself £8k. Could put that towards a house project or a cruise ship holiday.
Fortunately the money wasn't an issue, I have everything I am ever likely to need, and more besides, but I accept where you are coming from.To take it to the extreme, I could have bought a banger for £1000 and run it into the ground.
Wacky Racer said:
Eighteen months ago I needed a new car, having sold my three year old Zafira Tourer that I had from new.
I really needed an estate car or a people carrier, definitely a hatchback, I like larger cars and I sometimes need one for carting stuff about.
I settled on a new Mazda 6 Auto estate, in that smart red colour (Soul Red), the price was £26,000, (give or take), now I could have gone out and bought it outright, but figured after three years it would be worth around £12,000, therefore a depreciation loss of around £14,000, less any discount I might have negotiated.
I decided to go down the PCH route, £900 down, and around £310pm on a three year deal (An auto more expensive). I am 100% happy with the car, it is lovely, and I accept it is going to cost me around £11,000 in total when I hand it back (unmarked hopefully).
The way I look at it is, I have the use of a brand new car, nobody else has driven it, full makers warranty during my "ownership", so no unexpected bills, other than maybe front tyres maybe early next year, and no road tax to find.
I'm no worse off than if I'd have bought it, I've not had to lay £20,000 plus out and I don't have the hassle of trying to sell it on in eighteen months time.
Yes, I know I could have bought a decent four year old car for (say) 6k, and sold it for around 3k after three years, total cost £3k against £11k, but it would not have been a shiny new vehicle, and I could have been hit by a fairly hefty repair bill...(Gearbox etc)
Having lost a small fortune in depreciation over the last 40 years, changing cars every two or three years, is it better to think of a car like an "object" such as a fridge or washing machine?
So to sum up, it will have cost me me just over £10 per day (peanuts really) to have the use of a nice new reliable car, but maybe some might consider it 11k "down the drain".
(All figures approximate)
Opinions.....
Rather buy a 1 year old one for 16K.I really needed an estate car or a people carrier, definitely a hatchback, I like larger cars and I sometimes need one for carting stuff about.
I settled on a new Mazda 6 Auto estate, in that smart red colour (Soul Red), the price was £26,000, (give or take), now I could have gone out and bought it outright, but figured after three years it would be worth around £12,000, therefore a depreciation loss of around £14,000, less any discount I might have negotiated.
I decided to go down the PCH route, £900 down, and around £310pm on a three year deal (An auto more expensive). I am 100% happy with the car, it is lovely, and I accept it is going to cost me around £11,000 in total when I hand it back (unmarked hopefully).
The way I look at it is, I have the use of a brand new car, nobody else has driven it, full makers warranty during my "ownership", so no unexpected bills, other than maybe front tyres maybe early next year, and no road tax to find.
I'm no worse off than if I'd have bought it, I've not had to lay £20,000 plus out and I don't have the hassle of trying to sell it on in eighteen months time.
Yes, I know I could have bought a decent four year old car for (say) 6k, and sold it for around 3k after three years, total cost £3k against £11k, but it would not have been a shiny new vehicle, and I could have been hit by a fairly hefty repair bill...(Gearbox etc)
Having lost a small fortune in depreciation over the last 40 years, changing cars every two or three years, is it better to think of a car like an "object" such as a fridge or washing machine?
So to sum up, it will have cost me me just over £10 per day (peanuts really) to have the use of a nice new reliable car, but maybe some might consider it 11k "down the drain".
(All figures approximate)
Opinions.....
If it works for you and you’re happy, then I’m happy for you. That’s it.
Some people prioritize a new car over an older one, some don’t. Some people want the latest thing, some are hardened bangernomic experts. The best way to run a car is to pay for it in the matter that suits you best, be that lease, PCP, bangernomics or cash outright.
I buy older, pre-owned cars as I spend a lot of time out of the country. Paying £10/day (to use your example) for it to sit in the airport carpark doing nothing just feels wrong. The nature of the cars I run means it still might be more expensive overall to do it this way, but I’m happy with what I have, which neatly brings me back to my first sentence.
Some people prioritize a new car over an older one, some don’t. Some people want the latest thing, some are hardened bangernomic experts. The best way to run a car is to pay for it in the matter that suits you best, be that lease, PCP, bangernomics or cash outright.
I buy older, pre-owned cars as I spend a lot of time out of the country. Paying £10/day (to use your example) for it to sit in the airport carpark doing nothing just feels wrong. The nature of the cars I run means it still might be more expensive overall to do it this way, but I’m happy with what I have, which neatly brings me back to my first sentence.
Incoming lease/PCP bashing thread...
Having owned plenty of cars outright, 2x PCP and 1 lease I now just look at the right deal for the time.
At the moment we have 1 lease car that will cost £5600 over 2 years and 30k miles, it has replaced a £2500 car that threw £500 worth of bills, it was more to run etc. So we 'justified' the nice new shiny lease car because all costs accounted for we are paying £90 a month more than a 12 yr old honda. Not too bad.
Having owned plenty of cars outright, 2x PCP and 1 lease I now just look at the right deal for the time.
At the moment we have 1 lease car that will cost £5600 over 2 years and 30k miles, it has replaced a £2500 car that threw £500 worth of bills, it was more to run etc. So we 'justified' the nice new shiny lease car because all costs accounted for we are paying £90 a month more than a 12 yr old honda. Not too bad.
Wacky Racer said:
...
Having lost a small fortune in depreciation over the last 40 years, changing cars every two or three years, is it better to think of a car like an "object" such as a fridge or washing machine?
...
Why did you choose the car you did? Purely a tick box against requirements like you would a washing machine (Size, capacity, cheapest, job done), or was there a little bit of desire, emotion & 'I want that' in there?Having lost a small fortune in depreciation over the last 40 years, changing cars every two or three years, is it better to think of a car like an "object" such as a fridge or washing machine?
...
I find the philosophy required in leasing a car (Tool for a job, it's not mine & never will be; I have no reason to give a crap about it) incompatible with that emotional bit.
I’ve both leased and bought 2nd hand cars around the 6k mark for the last 15 years or so. I’ve done the sums and crunched the spreadsheets and while leasing does work out slightly more expensive, it’s only by around £75 a month when factoring in depreciation, repair bills, tyres, MOT’s, Tax etc. for the 2nd hand cars. So the way I see it is I get to drive a brand new car, hassle free, for £75 per month and that suits me fine.
DaveCWK said:
Why did you choose the car you did? Purely a tick box against requirements like you would a washing machine (Size, capacity, cheapest, job done), or was there a little bit of desire, emotion & 'I want that' in there?
I find the philosophy required in leasing a car (Tool for a job, it's not mine & never will be; I have no reason to give a crap about it) incompatible with that emotional bit.
Simply because my brother leased exactly the same car two weeks earlier, (but manual in blue) and I liked it. Over the years I have had many nice new cars, Morgans, CLS's, Capri's, Westfields and I have been very attached to all of them, but I think I have just grown out of that stuff now. To me a car is just a workhorse, I'd have never have thought that ten years ago.... I find the philosophy required in leasing a car (Tool for a job, it's not mine & never will be; I have no reason to give a crap about it) incompatible with that emotional bit.
I have a strong aversion to any form of long term debt, avoiding it as much as possible. Which is why I bought my car (main dealer approved used so 1 yr warranty with option to extend) outright with cash. Your approach isn't my cup of tea but if you know what you're doing and it works for you, then good for you.
It's idiots like that student who was in a BBC article a few weeks back moaning about how she couldn't make payments on a brand new Audi that give it a bad name
It's idiots like that student who was in a BBC article a few weeks back moaning about how she couldn't make payments on a brand new Audi that give it a bad name
Edited by Ar63 on Wednesday 24th July 21:58
I don't get the haters for leasing or pcp. Ultimately loads who hate it benefit from buying second hand. That market is supported by new car sales. Good job though as they also support the new car sales by providing a good value down the line.
It all depends what you want to do. If you can afford it and it's what you want then why not. I tend to look at it as I like new and j can't be arsed with hassle of selling and any risk.
For example my current A4 is worth less than I'd have expected as of the recent dislike for diesel. I'm not at risk of it though as I can give it back.
I factored in the idea the car would owe me nothing when I come to change it and I'm at peace with that.
Now I could save money by buying second hand but j don't smoke, I don't drink (regularly) and you can't take your money with you when your dead. Got to spend it somehow.
It all depends what you want to do. If you can afford it and it's what you want then why not. I tend to look at it as I like new and j can't be arsed with hassle of selling and any risk.
For example my current A4 is worth less than I'd have expected as of the recent dislike for diesel. I'm not at risk of it though as I can give it back.
I factored in the idea the car would owe me nothing when I come to change it and I'm at peace with that.
Now I could save money by buying second hand but j don't smoke, I don't drink (regularly) and you can't take your money with you when your dead. Got to spend it somehow.
Leasing can stack up well but only if the lease period matches the duration you would’ve kept the car had you bought it.
If there’s a chance you would’ve kept the car even a matter of months longer than the lease period then the cost of leasing really starts to bite.
You have also assumed zero discount. Who buys a car without some kind of discount.
If there’s a chance you would’ve kept the car even a matter of months longer than the lease period then the cost of leasing really starts to bite.
You have also assumed zero discount. Who buys a car without some kind of discount.
HustleRussell said:
Leasing can stack up well but only if the lease period matches the duration you would’ve kept the car had you bought it.
If there’s a chance you would’ve kept the car even a matter of months longer than the lease period then the cost of leasing really starts to bite.
You have also assumed zero discount. Who buys a car without some kind of discount.
I did mention I could have negotiated some discount off the "list" price in my OP if I'd have pushed hard, but never asked as I wasn't interested in buying at that time If there’s a chance you would’ve kept the car even a matter of months longer than the lease period then the cost of leasing really starts to bite.
You have also assumed zero discount. Who buys a car without some kind of discount.
In another eighteen months I will have exactly the same dilemma, hence why I asked for PH'ers thoughts.
Well it sounds like it works for you, and that's all that matters at the end of the day!
In 40+ years I've only once had a current plate car - and I cheated then as it was pre-registered!
But at the time I was getting a car allowance and doing business miles so was expected to have something that would always work.
The downside was I just never knew how many business miles I was likely to do, which would have made PCP or PCH difficult because as I understand it those sorts of deals always come with mileage limits and if you exceed them it can get expensive!
Now I'm no longer working I definitely wouldn't want to commit to significant monthly outgoings so I just buy - and if I go for something older I can get a better car.
What works best really depends on your specific circumstances.
In 40+ years I've only once had a current plate car - and I cheated then as it was pre-registered!
But at the time I was getting a car allowance and doing business miles so was expected to have something that would always work.
The downside was I just never knew how many business miles I was likely to do, which would have made PCP or PCH difficult because as I understand it those sorts of deals always come with mileage limits and if you exceed them it can get expensive!
Now I'm no longer working I definitely wouldn't want to commit to significant monthly outgoings so I just buy - and if I go for something older I can get a better car.
What works best really depends on your specific circumstances.
Wacky Racer said:
HustleRussell said:
Leasing can stack up well but only if the lease period matches the duration you would’ve kept the car had you bought it.
If there’s a chance you would’ve kept the car even a matter of months longer than the lease period then the cost of leasing really starts to bite.
You have also assumed zero discount. Who buys a car without some kind of discount.
I did mention I could have negotiated some discount off the "list" price in my OP if I'd have pushed hard, but never asked as I wasn't interested in buying at that time If there’s a chance you would’ve kept the car even a matter of months longer than the lease period then the cost of leasing really starts to bite.
You have also assumed zero discount. Who buys a car without some kind of discount.
In another eighteen months I will have exactly the same dilemma, hence why I asked for PH'ers thoughts.
I don’t lease or pcp a car as my mileage is astronomical so it wouldn’t work.
But if I did a normal mileage, setting a monthly amount I’m willing to never see again and getting a brand new car, would appeal.
The same way I do with sky and Netflix, I don’t own the films I watch them and lose access if I leave. I do this instead of buying blue rays.
Other than on ph I’ve never heard a bad word said against lease or pcp.
From what I can gather one here:
- jealous people hate it as they drive sheds and can’t afford the 2-300 a month so take some sort of high ground.
- people who consider themselves successful can no longer look down their nose as anyone can have a bmw or merc. Previously it let people know they were better than them
- some people can’t comprehend paying for a car as a service so will quote spreadsheet stats at why it’s terrible financially
-some people can’t comprehend people wanting a new car
-some people I suspect are just trolling
But if I did a normal mileage, setting a monthly amount I’m willing to never see again and getting a brand new car, would appeal.
The same way I do with sky and Netflix, I don’t own the films I watch them and lose access if I leave. I do this instead of buying blue rays.
Other than on ph I’ve never heard a bad word said against lease or pcp.
From what I can gather one here:
- jealous people hate it as they drive sheds and can’t afford the 2-300 a month so take some sort of high ground.
- people who consider themselves successful can no longer look down their nose as anyone can have a bmw or merc. Previously it let people know they were better than them
- some people can’t comprehend paying for a car as a service so will quote spreadsheet stats at why it’s terrible financially
-some people can’t comprehend people wanting a new car
-some people I suspect are just trolling
I don't do many miles so I prefer to run something old and interesting. Leasing makes enough sense though for those who want a new car every few years and there are some really good deals out there. I have two issues though...
1: If you have to exit the lease early you can be hit with a huge penalty. In other words, if I were made redundant and could no longer afford the lease payments I'd then find myself hit with a penalty of thousands at a time when I needed that money to pay for food and shelter!
2: Conflict between the vehicle provider and myself as to what constitutes an acceptable condition of the car when it's handed back. If I were buying a three year old car I wouldn't expect it to be pristine, but I'd be concerned that the vehicle provider would have such an expectation and that I'd be lumbered with hefty penalties for what would be, in reality, perfectly realistic cosmetic imperfections on a three year old car.
There would have to be a financial product that I could purchase at the outset which would indemnify me against both of the above potential costs for me to consider leasing.
1: If you have to exit the lease early you can be hit with a huge penalty. In other words, if I were made redundant and could no longer afford the lease payments I'd then find myself hit with a penalty of thousands at a time when I needed that money to pay for food and shelter!
2: Conflict between the vehicle provider and myself as to what constitutes an acceptable condition of the car when it's handed back. If I were buying a three year old car I wouldn't expect it to be pristine, but I'd be concerned that the vehicle provider would have such an expectation and that I'd be lumbered with hefty penalties for what would be, in reality, perfectly realistic cosmetic imperfections on a three year old car.
There would have to be a financial product that I could purchase at the outset which would indemnify me against both of the above potential costs for me to consider leasing.
The weird thing is I am somewhat jealous of those who can go and find that used 911 drive it for a few years and sell it with little loss, and I've considered it, but then I like my modern interiors, I can't be arsed learning the nitty gritty of what to look out for to make sure I don't get something that's gonna need constant work, I like the idea I wake up and drive to work in a car that's incredibly reliable, if anything goes wrong it's not at my expense. I also really value safety. My kids are my world, my cars therefore have to be the safest they can be. That's often modern cars, with no underlying unknown issues.
The added cost (ignoring the modern bit which adds cost of course) is not worth to me the time and risk. I do wish it was and I could change my mindset.
Easy life I guess, and my time is more valuable than the money I would effectively save.
The added cost (ignoring the modern bit which adds cost of course) is not worth to me the time and risk. I do wish it was and I could change my mindset.
Easy life I guess, and my time is more valuable than the money I would effectively save.
The weird thing is I am somewhat jealous of those who can go and find that used 911 drive it for a few years and sell it with little loss, and I've considered it, but then I like my modern interiors, I can't be arsed learning the nitty gritty of what to look out for to make sure I don't get something that's gonna need constant work, I like the idea I wake up and drive to work in a car that's incredibly reliable, if anything goes wrong it's not at my expense. I also really value safety. My kids are my world, my cars therefore have to be the safest they can be. That's often modern cars, with no underlying unknown issues.
The added cost (ignoring the modern bit which adds cost of course) is not worth to me the time and risk. I do wish it was and I could change my mindset.
Easy life I guess, and my time is more valuable than the money I would effectively save.
The added cost (ignoring the modern bit which adds cost of course) is not worth to me the time and risk. I do wish it was and I could change my mindset.
Easy life I guess, and my time is more valuable than the money I would effectively save.
Edited by anonymous-user on Wednesday 24th July 22:42
OP, your post makes complete sense.
You are happy to pay the premium for the right to drive a brand new car over a set period of time. This is because you would like a brand new car for various, well thought out reasons.
You recognise that you are not “trapped” in the lease deal and when the term is up, you are free to either lease another new car again, or indeed buy a used car.
You are happy with the monthly payments, feel they are affordable, and have capital in the bank should you wish to pay the lease off early, or it’s there to use on a rainy day.
This is all very sensible.
Unfortunately, there will be the usual suspects who will not understand this reasoning and tell you why this is the worst decision you’ve ever made. How you are the very reason why this country’s finances are in turmoil. They will also tell you the sole reason you’ve leased a car is because you want to impress the neighbours. They will likely also call me a car salesman.
You wally OP.
You are happy to pay the premium for the right to drive a brand new car over a set period of time. This is because you would like a brand new car for various, well thought out reasons.
You recognise that you are not “trapped” in the lease deal and when the term is up, you are free to either lease another new car again, or indeed buy a used car.
You are happy with the monthly payments, feel they are affordable, and have capital in the bank should you wish to pay the lease off early, or it’s there to use on a rainy day.
This is all very sensible.
Unfortunately, there will be the usual suspects who will not understand this reasoning and tell you why this is the worst decision you’ve ever made. How you are the very reason why this country’s finances are in turmoil. They will also tell you the sole reason you’ve leased a car is because you want to impress the neighbours. They will likely also call me a car salesman.
You wally OP.
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