Leasing a car. My take on it.
Discussion
I had a PCP motorbike once. The monthly payments were a lot less than my mileage claim. The deposit was 1k and all things considered, tyres, insurance TAX and petrol. it was making me around £80 - £100 a month.
A 3-year deal was about to come to an end, and I crashed it. The bike had around £4k remaining on it and was worth around £6k. The insurance company rules said if I wanted to contest the payout then I had to show them 3 x private adverts of similar milage of the same type of bike.
It was the middle of winter. There were only 4 private bikes for sale. A dealer would sell me one for 7k, private, the cheapest was 9k.
Insurance paid out the 9k.
Over the whole deal, I made around 10K profit. So leasing and PCP can work.
That was the only care or bike I have ever had on finance.
A 3-year deal was about to come to an end, and I crashed it. The bike had around £4k remaining on it and was worth around £6k. The insurance company rules said if I wanted to contest the payout then I had to show them 3 x private adverts of similar milage of the same type of bike.
It was the middle of winter. There were only 4 private bikes for sale. A dealer would sell me one for 7k, private, the cheapest was 9k.
Insurance paid out the 9k.
Over the whole deal, I made around 10K profit. So leasing and PCP can work.
That was the only care or bike I have ever had on finance.
Most people I know that are against leasing have either realised the monthly payment is outwith their means and therefore 'stupid' or spend their money on lavish holidays every year etc.
I can't wait for someone to quote this and say "lol people that lease drive cars outwith their means." And then for someone to quote that post saying "I guess you bought your house cash then and didn't get a mortgage?"
These threads always go the same way.
I can't wait for someone to quote this and say "lol people that lease drive cars outwith their means." And then for someone to quote that post saying "I guess you bought your house cash then and didn't get a mortgage?"
These threads always go the same way.
Mandat said:
From the many threads on here, it appears that most people who seem to be vehemently against leasing or other car finance, most likely don't fully understand how it works or are being deliberately obtuse and are simply trolling.
What they never seem to accept is that it’s a spectrum. Undoubtedly running something new (by whatever payment mechanism) costs more than running a 2 year old second hand car. But that also costs more than running a 10 year old car, which in turn costs more than walking. The question then is just a case of where on that spectrum are you as an individual happy with the cost/benefit tradeoff? Everyone has their different sweet spot. 
Venturist said:
What they never seem to accept is that it’s a spectrum. Undoubtedly running something new (by whatever payment mechanism) costs more than running a 2 year old second hand car. But that also costs more than running a 10 year old car, which in turn costs more than walking. The question then is just a case of where on that spectrum are you as an individual happy with the cost/benefit tradeoff? Everyone has their different sweet spot.
Very well put.Not a lease but I have a company car which is a similar principle in that I pay money and don't get any equity.
I get to drive a £45k car with no tax, insurance, tyres etc for £250 a month.
Over the 2 years I'll have it I'll have spent £6k - can I get anything like what I have for that price? Not in a million years, plus that £6k car will probably be worth £3 or £4k in a couple of years.
I get to drive a £45k car with no tax, insurance, tyres etc for £250 a month.
Over the 2 years I'll have it I'll have spent £6k - can I get anything like what I have for that price? Not in a million years, plus that £6k car will probably be worth £3 or £4k in a couple of years.
Another example of why I love leasing...
I want a 4x4 as my next daily. I could cash buy or PCP new or secondhand or lease new. I fancy a Jag F Pace, RR sport/velar etc. Looking in all the usual places a lease deal pops up for a RR velar, R Dynamic SE petrol, £62k P11D value - the lease is £500pm inc VAT for 24 months and 16k miles. So, £12k all in for the first 2 years of a £62k car's life. How is that not a bargain?!
I saw a PCP 'deal' advertised on LR's website for a lower spec car for £500 per month, with £11k deposit! I also had a look at F paces last weekend, a nearly new top spec one that I'd like is around £45k, but it would cost me more to PCP or HP that car over the 2 years than to have the brand new RR. I bought my weekend car (F Type) outright, secondhand, for £45k just shy of 2 years ago, thinking that the poor first owner had taken the big depreciation hit for me and I was being all sensible. Now I'm trying to trade it and the best offer I've had so far is £27.5k. So I've been exposed to all that depreciation and the cost of the capital being tied up in that car when perhaps it could have been avoided with the right finance product or a good lease deal.
I understand these aren't cheap cars but I have no interest in buying a car for a couple of grand and running it into the ground. It's just that it's clear that there are better and worse ways of getting into certain cars, and although I used to always think 'cash is king' I've realised that this is now probably the opposite. In what world would I pay £62k of my own money for the Velar, or pay the interest on that amount to finance it, and be exposed to unknown depreciation over the next couple of years when I can have it for a straight monthly payment, and know exactly what my full exposure is from the start?
I think the bottom line of leasing and this thread is if you want a new car and are happy to pay for it (which many are) then leasing with the right deal can be by far the most financially sensible way of achieving that, or getting into a car far more expensive than you thought possible (look at the current Volvo deals for >£40k cars!) Obviously this doesn't and won't ever appeal to anyone that wants to run a car for the minimum outlay, doesn't want to be tied into a monthly payment or doesn't want a new car - stating that is a waste of a comment!
I want a 4x4 as my next daily. I could cash buy or PCP new or secondhand or lease new. I fancy a Jag F Pace, RR sport/velar etc. Looking in all the usual places a lease deal pops up for a RR velar, R Dynamic SE petrol, £62k P11D value - the lease is £500pm inc VAT for 24 months and 16k miles. So, £12k all in for the first 2 years of a £62k car's life. How is that not a bargain?!
I saw a PCP 'deal' advertised on LR's website for a lower spec car for £500 per month, with £11k deposit! I also had a look at F paces last weekend, a nearly new top spec one that I'd like is around £45k, but it would cost me more to PCP or HP that car over the 2 years than to have the brand new RR. I bought my weekend car (F Type) outright, secondhand, for £45k just shy of 2 years ago, thinking that the poor first owner had taken the big depreciation hit for me and I was being all sensible. Now I'm trying to trade it and the best offer I've had so far is £27.5k. So I've been exposed to all that depreciation and the cost of the capital being tied up in that car when perhaps it could have been avoided with the right finance product or a good lease deal.
I understand these aren't cheap cars but I have no interest in buying a car for a couple of grand and running it into the ground. It's just that it's clear that there are better and worse ways of getting into certain cars, and although I used to always think 'cash is king' I've realised that this is now probably the opposite. In what world would I pay £62k of my own money for the Velar, or pay the interest on that amount to finance it, and be exposed to unknown depreciation over the next couple of years when I can have it for a straight monthly payment, and know exactly what my full exposure is from the start?
I think the bottom line of leasing and this thread is if you want a new car and are happy to pay for it (which many are) then leasing with the right deal can be by far the most financially sensible way of achieving that, or getting into a car far more expensive than you thought possible (look at the current Volvo deals for >£40k cars!) Obviously this doesn't and won't ever appeal to anyone that wants to run a car for the minimum outlay, doesn't want to be tied into a monthly payment or doesn't want a new car - stating that is a waste of a comment!
Shrimpvende said:
Another example of why I love leasing...
I want a 4x4 as my next daily. I could cash buy or PCP new or secondhand or lease new. I fancy a Jag F Pace, RR sport/velar etc. Looking in all the usual places a lease deal pops up for a RR velar, R Dynamic SE petrol, £62k P11D value - the lease is £500pm inc VAT for 24 months and 16k miles. So, £12k all in for the first 2 years of a £62k car's life. How is that not a bargain?!
I saw a PCP 'deal' advertised on LR's website for a lower spec car for £500 per month, with £11k deposit! I also had a look at F paces last weekend, a nearly new top spec one that I'd like is around £45k, but it would cost me more to PCP or HP that car over the 2 years than to have the brand new RR. I bought my weekend car (F Type) outright, secondhand, for £45k just shy of 2 years ago, thinking that the poor first owner had taken the big depreciation hit for me and I was being all sensible. Now I'm trying to trade it and the best offer I've had so far is £27.5k. So I've been exposed to all that depreciation and the cost of the capital being tied up in that car when perhaps it could have been avoided with the right finance product or a good lease deal.
I understand these aren't cheap cars but I have no interest in buying a car for a couple of grand and running it into the ground. It's just that it's clear that there are better and worse ways of getting into certain cars, and although I used to always think 'cash is king' I've realised that this is now probably the opposite. In what world would I pay £62k of my own money for the Velar, or pay the interest on that amount to finance it, and be exposed to unknown depreciation over the next couple of years when I can have it for a straight monthly payment, and know exactly what my full exposure is from the start?
I think the bottom line of leasing and this thread is if you want a new car and are happy to pay for it (which many are) then leasing with the right deal can be by far the most financially sensible way of achieving that, or getting into a car far more expensive than you thought possible (look at the current Volvo deals for >£40k cars!) Obviously this doesn't and won't ever appeal to anyone that wants to run a car for the minimum outlay, doesn't want to be tied into a monthly payment or doesn't want a new car - stating that is a waste of a comment!
Very well said.I want a 4x4 as my next daily. I could cash buy or PCP new or secondhand or lease new. I fancy a Jag F Pace, RR sport/velar etc. Looking in all the usual places a lease deal pops up for a RR velar, R Dynamic SE petrol, £62k P11D value - the lease is £500pm inc VAT for 24 months and 16k miles. So, £12k all in for the first 2 years of a £62k car's life. How is that not a bargain?!
I saw a PCP 'deal' advertised on LR's website for a lower spec car for £500 per month, with £11k deposit! I also had a look at F paces last weekend, a nearly new top spec one that I'd like is around £45k, but it would cost me more to PCP or HP that car over the 2 years than to have the brand new RR. I bought my weekend car (F Type) outright, secondhand, for £45k just shy of 2 years ago, thinking that the poor first owner had taken the big depreciation hit for me and I was being all sensible. Now I'm trying to trade it and the best offer I've had so far is £27.5k. So I've been exposed to all that depreciation and the cost of the capital being tied up in that car when perhaps it could have been avoided with the right finance product or a good lease deal.
I understand these aren't cheap cars but I have no interest in buying a car for a couple of grand and running it into the ground. It's just that it's clear that there are better and worse ways of getting into certain cars, and although I used to always think 'cash is king' I've realised that this is now probably the opposite. In what world would I pay £62k of my own money for the Velar, or pay the interest on that amount to finance it, and be exposed to unknown depreciation over the next couple of years when I can have it for a straight monthly payment, and know exactly what my full exposure is from the start?
I think the bottom line of leasing and this thread is if you want a new car and are happy to pay for it (which many are) then leasing with the right deal can be by far the most financially sensible way of achieving that, or getting into a car far more expensive than you thought possible (look at the current Volvo deals for >£40k cars!) Obviously this doesn't and won't ever appeal to anyone that wants to run a car for the minimum outlay, doesn't want to be tied into a monthly payment or doesn't want a new car - stating that is a waste of a comment!
It's great that people have a choice (and important that they understand that choice they're making). Some people like zero-hours contracts. Some people like renting property over buying. Do what works for you.
Shrimpvende said:
Another example of why I love leasing...
I want a 4x4 as my next daily. I could cash buy or PCP new or secondhand or lease new. I fancy a Jag F Pace, RR sport/velar etc. Looking in all the usual places a lease deal pops up for a RR velar, R Dynamic SE petrol, £62k P11D value - the lease is £500pm inc VAT for 24 months and 16k miles. So, £12k all in for the first 2 years of a £62k car's life. How is that not a bargain?!
I saw a PCP 'deal' advertised on LR's website for a lower spec car for £500 per month, with £11k deposit! I also had a look at F paces last weekend, a nearly new top spec one that I'd like is around £45k, but it would cost me more to PCP or HP that car over the 2 years than to have the brand new RR. I bought my weekend car (F Type) outright, secondhand, for £45k just shy of 2 years ago, thinking that the poor first owner had taken the big depreciation hit for me and I was being all sensible. Now I'm trying to trade it and the best offer I've had so far is £27.5k. So I've been exposed to all that depreciation and the cost of the capital being tied up in that car when perhaps it could have been avoided with the right finance product or a good lease deal.
I understand these aren't cheap cars but I have no interest in buying a car for a couple of grand and running it into the ground. It's just that it's clear that there are better and worse ways of getting into certain cars, and although I used to always think 'cash is king' I've realised that this is now probably the opposite. In what world would I pay £62k of my own money for the Velar, or pay the interest on that amount to finance it, and be exposed to unknown depreciation over the next couple of years when I can have it for a straight monthly payment, and know exactly what my full exposure is from the start?
I think the bottom line of leasing and this thread is if you want a new car and are happy to pay for it (which many are) then leasing with the right deal can be by far the most financially sensible way of achieving that, or getting into a car far more expensive than you thought possible (look at the current Volvo deals for >£40k cars!) Obviously this doesn't and won't ever appeal to anyone that wants to run a car for the minimum outlay, doesn't want to be tied into a monthly payment or doesn't want a new car - stating that is a waste of a comment!
Is it really a £62k car, or is the list price inflated to make the lease price more attractive, given that very few people buy brand new cars for cash?I want a 4x4 as my next daily. I could cash buy or PCP new or secondhand or lease new. I fancy a Jag F Pace, RR sport/velar etc. Looking in all the usual places a lease deal pops up for a RR velar, R Dynamic SE petrol, £62k P11D value - the lease is £500pm inc VAT for 24 months and 16k miles. So, £12k all in for the first 2 years of a £62k car's life. How is that not a bargain?!
I saw a PCP 'deal' advertised on LR's website for a lower spec car for £500 per month, with £11k deposit! I also had a look at F paces last weekend, a nearly new top spec one that I'd like is around £45k, but it would cost me more to PCP or HP that car over the 2 years than to have the brand new RR. I bought my weekend car (F Type) outright, secondhand, for £45k just shy of 2 years ago, thinking that the poor first owner had taken the big depreciation hit for me and I was being all sensible. Now I'm trying to trade it and the best offer I've had so far is £27.5k. So I've been exposed to all that depreciation and the cost of the capital being tied up in that car when perhaps it could have been avoided with the right finance product or a good lease deal.
I understand these aren't cheap cars but I have no interest in buying a car for a couple of grand and running it into the ground. It's just that it's clear that there are better and worse ways of getting into certain cars, and although I used to always think 'cash is king' I've realised that this is now probably the opposite. In what world would I pay £62k of my own money for the Velar, or pay the interest on that amount to finance it, and be exposed to unknown depreciation over the next couple of years when I can have it for a straight monthly payment, and know exactly what my full exposure is from the start?
I think the bottom line of leasing and this thread is if you want a new car and are happy to pay for it (which many are) then leasing with the right deal can be by far the most financially sensible way of achieving that, or getting into a car far more expensive than you thought possible (look at the current Volvo deals for >£40k cars!) Obviously this doesn't and won't ever appeal to anyone that wants to run a car for the minimum outlay, doesn't want to be tied into a monthly payment or doesn't want a new car - stating that is a waste of a comment!
I'm interested in what the non-lease guys think the ideal way to buy/run a car is?
There is still quite a bit of opportunity cost involved in tying up cash in something fairly modern. Not to mention the increased cost of services/repairs as cars age etc. Is it really worth it to save 100 quid a month?
There is still quite a bit of opportunity cost involved in tying up cash in something fairly modern. Not to mention the increased cost of services/repairs as cars age etc. Is it really worth it to save 100 quid a month?
nmd87 said:
Is it really a £62k car, or is the list price inflated to make the lease price more attractive, given that very few people buy brand new cars for cash?
I never look at the price list. I compare what I can buy the car at after max discount and the resulting predicted depreciation over the lease period. And then compare to the total cost of the lease over the term minus a bit of opportunity cost at say 2%pa, your typical mortgage rate. I am sure some get overexcited about a high price list, but that doesn't matter too much.
nickfrog said:
nmd87 said:
Is it really a £62k car, or is the list price inflated to make the lease price more attractive, given that very few people buy brand new cars for cash?
I never look at the price list. I compare what I can buy the car at after max discount and the resulting predicted depreciation over the lease period. And then compare to the total cost of the lease over the term minus a bit of opportunity cost at say 2%pa, your typical mortgage rate. I am sure some get overexcited about a high price list, but that doesn't matter too much.
all things being equal the cash buyer should be able to secure the most cost effective deal, clearly in many cases leasing is much cheaper. anyone with insight on the business models?
Shrimpvende said:
Another example of why I love leasing...
I want a 4x4 as my next daily. I could cash buy or PCP new or secondhand or lease new. I fancy a Jag F Pace, RR sport/velar etc. Looking in all the usual places a lease deal pops up for a RR velar, R Dynamic SE petrol, £62k P11D value - the lease is £500pm inc VAT for 24 months and 16k miles. So, £12k all in for the first 2 years of a £62k car's life. How is that not a bargain?!
I saw a PCP 'deal' advertised on LR's website for a lower spec car for £500 per month, with £11k deposit! I also had a look at F paces last weekend, a nearly new top spec one that I'd like is around £45k, but it would cost me more to PCP or HP that car over the 2 years than to have the brand new RR. I bought my weekend car (F Type) outright, secondhand, for £45k just shy of 2 years ago, thinking that the poor first owner had taken the big depreciation hit for me and I was being all sensible. Now I'm trying to trade it and the best offer I've had so far is £27.5k. So I've been exposed to all that depreciation and the cost of the capital being tied up in that car when perhaps it could have been avoided with the right finance product or a good lease deal.
I understand these aren't cheap cars but I have no interest in buying a car for a couple of grand and running it into the ground. It's just that it's clear that there are better and worse ways of getting into certain cars, and although I used to always think 'cash is king' I've realised that this is now probably the opposite. In what world would I pay £62k of my own money for the Velar, or pay the interest on that amount to finance it, and be exposed to unknown depreciation over the next couple of years when I can have it for a straight monthly payment, and know exactly what my full exposure is from the start?
I think the bottom line of leasing and this thread is if you want a new car and are happy to pay for it (which many are) then leasing with the right deal can be by far the most financially sensible way of achieving that, or getting into a car far more expensive than you thought possible (look at the current Volvo deals for >£40k cars!) Obviously this doesn't and won't ever appeal to anyone that wants to run a car for the minimum outlay, doesn't want to be tied into a monthly payment or doesn't want a new car - stating that is a waste of a comment!
Have you got a link to the 500pm deal please?I want a 4x4 as my next daily. I could cash buy or PCP new or secondhand or lease new. I fancy a Jag F Pace, RR sport/velar etc. Looking in all the usual places a lease deal pops up for a RR velar, R Dynamic SE petrol, £62k P11D value - the lease is £500pm inc VAT for 24 months and 16k miles. So, £12k all in for the first 2 years of a £62k car's life. How is that not a bargain?!
I saw a PCP 'deal' advertised on LR's website for a lower spec car for £500 per month, with £11k deposit! I also had a look at F paces last weekend, a nearly new top spec one that I'd like is around £45k, but it would cost me more to PCP or HP that car over the 2 years than to have the brand new RR. I bought my weekend car (F Type) outright, secondhand, for £45k just shy of 2 years ago, thinking that the poor first owner had taken the big depreciation hit for me and I was being all sensible. Now I'm trying to trade it and the best offer I've had so far is £27.5k. So I've been exposed to all that depreciation and the cost of the capital being tied up in that car when perhaps it could have been avoided with the right finance product or a good lease deal.
I understand these aren't cheap cars but I have no interest in buying a car for a couple of grand and running it into the ground. It's just that it's clear that there are better and worse ways of getting into certain cars, and although I used to always think 'cash is king' I've realised that this is now probably the opposite. In what world would I pay £62k of my own money for the Velar, or pay the interest on that amount to finance it, and be exposed to unknown depreciation over the next couple of years when I can have it for a straight monthly payment, and know exactly what my full exposure is from the start?
I think the bottom line of leasing and this thread is if you want a new car and are happy to pay for it (which many are) then leasing with the right deal can be by far the most financially sensible way of achieving that, or getting into a car far more expensive than you thought possible (look at the current Volvo deals for >£40k cars!) Obviously this doesn't and won't ever appeal to anyone that wants to run a car for the minimum outlay, doesn't want to be tied into a monthly payment or doesn't want a new car - stating that is a waste of a comment!
CABC said:
obviously the right approach Nick. it still intrigues me what the actual mechanics and reasoning is with the manufacturers. in some cases they're clearly discounting for leases but not for cash buyers, naturally not to undermine their list price. beyond that is the model that cancellation charges might make more £ or that it's easier to secure loyalty and upgrade business from leases?
all things being equal the cash buyer should be able to secure the most cost effective deal, clearly in many cases leasing is much cheaper. anyone with insight on the business models?
Yes true and that's frustrating to be punished just because you prefer cash although some like BMW seem to be fair. I even got a BMW FS additional discount for borrowing £5k which the salesman knew I would settle straight away.all things being equal the cash buyer should be able to secure the most cost effective deal, clearly in many cases leasing is much cheaper. anyone with insight on the business models?
Gassing Station | Car Buying | Top of Page | What's New | My Stuff