Golf R Estate - lease new vs buy second hand.

[Dammit]

Hello all, I think I've decided on a car, now I need to work out the most efficient method of getting into it.

Here's an example of a VW Approved Used car, at £29,995: https://usedcars.volkswagen.co.uk/en/used-cars/vol...

I'd likely want to finance some of that - I've got around 20k in cash that could go toward it, more as time passes.

Here's a lease deal, which adds up to a total of £17,250 for three years: https://www.contracthireandleasing.com/independent...

So I can cover the lease (and then some) with cash on hand at the moment, to buy I'd need to find some more cash or finance ~10k.

Which is the best option, and why? Please show your working.

[Dave Hedgehog]

always look at TOTAL COST OF OWNERSHIP

assuming running costs, ins, mileage, tyres etc. will be the same just look at the total cost of finance

add up all the lease costs and fees and compare it to the cost of the 10k finance with your deposit and what the car will be worth to sell

generally i find buying a car with a large deposit works out a lot cheaper over all, most people only focus on the monthlies and end up paying hugely for it

Edited by Dave Hedgehog on Sunday 11th February 10:27

[Dammit]

I'm not entirely sure how to work out what the car would be worth in three years- it's on 50 miles now, I would likely add around 5,000/year, so in three years it would be on around 15k miles, in great condition, but the previous model as it'd have been replaced by then.

Lets say it's worth 15k at time of sale, my total outlay is looking pretty similar - add on a couple of grand for finance and we're roughly at parity.

[Dave Hedgehog]

Dammit said:

I'm not entirely sure how to work out what the car would be worth in three years- it's on 50 miles now, I would likely add around 5,000/year, so in three years it would be on around 15k miles, in great condition, but the previous model as it'd have been replaced by then.

Lets say it's worth 15k at time of sale, my total outlay is looking pretty similar - add on a couple of grand for finance and we're roughly at parity.

15k seams reasonable, 2014 cars with 30k (none estate) are showing from 18.5k

if the costs are close go with what is the most convenient for you

[Dammit]

Residuals are key here, if it's worth 20k in 2021 then that pushes it firmly into "buy is best".

Hmm.

[Toed64]

Your guess at the value of an immaculate, 3 year old Golf R estate, might be a tad low. 15000 miles is VERY low nowadays, so I think your car would be worth a fair premium over the average mileage cars with more than twice the oddo reading.

Here's the first ad from an ebay search for an R estate:

https://www.ebay.co.uk/itm/2015-VOLKSWAGEN-GOLF-2-...

People like me, who don't want to flush the first years of depreciation money, have created a very strong demand for 2/3/4 year old, niche market cars. On this basis, you would probably save £5000 over three years if you bought one.

[Dammit]

Interesting - thanks.

If we take the car I posted at the top of the thread as a good example of what I'd buy, are there any specification errors or omissions that would harm it's future value?

i.e. are there any must-have options that people will cause people to ignore the car if it doesn't have them?

(When looking for my 911 I ignored any that didn't have hard-backed sports seats and the three spoke steering wheel, for e.g.)

[Wooda80]

Dave Hedgehog said:

Dammit said:

I'm not entirely sure how to work out what the car would be worth in three years- it's on 50 miles now, I would likely add around 5,000/year, so in three years it would be on around 15k miles, in great condition, but the previous model as it'd have been replaced by then.

Lets say it's worth 15k at time of sale, my total outlay is looking pretty similar - add on a couple of grand for finance and we're roughly at parity.

15k seams reasonable, 2014 cars with 30k (none estate) are showing from 18.5k

if the costs are close go with what is the most convenient for you

Wouldn't disagree massively with any of the above.

Things that might help you decide one way or the other:

Is there anything else that you might want to do with the £20000 capital that you have set aside for this?
Would it be a disaster if there was a downturn in used car values and the car was worth less than the £15000 estimated?
If the answer(s) to the above are Yes then consider leasing

Is it likely that you will want or need to change the car within the next 3 years? ( Possible reasons: change in financial circumstances - either positive or negative, change in use - doing many more miles or car no longer needed at all, change in family circumstances - needing a bigger or smaller car, hell I get itchy feet and always fancy something else after a year or two )
If Yes to the above then consider outright purchase.

[Toed64]

Dammit said:

Interesting - thanks.

If we take the car I posted at the top of the thread as a good example of what I'd buy, are there any specification errors or omissions that would harm it's future value?

i.e. are there any must-have options that people will cause people to ignore the car if it doesn't have them?

(When looking for my 911 I ignored any that didn't have hard-backed sports seats and the three spoke steering wheel, for e.g.)

The only thing I noticed was cloth seats - some prefer leather - I actually prefer cloth...except on BMWs without leather that have 1/2 cloth/ 1/2 faux leather that cracks and splits!

[Wooda80]

Dammit said:

Residuals are key here, if it's worth 20k in 2021 then that pushes it firmly into "buy is best".

Hmm.

Be careful not to base your decision on a model of "best possible case" since if reality turns out to be anything less than that you will be disappointed.

In terms of speccing the car there seems to be a premium for leather and nav equipped cars but you won't recover the full cost of these options after 3 years so only spec them if you want them yourself.

Here's something to consider though:

The R Estate is very much a niche in the overall market, in the grand scheme of things there are not many people who set out to buy a smallish very high performance estate car. The R Estate has been marketed quite hard in the new car leasing market however, and there will be many people who chose one despite it being an estate just because it's still an excellent car and that happened to be the one with a deal on it. This creates a situation where there may be more R Estates coming off lease in 2 or 3 years than the used car market has a taste for. In this situation values can only go one way.

If you particularly want the Estate yourself then go for it. It's a fabulous car by all accounts and there's little else that offers that particular blend of attributes. On the other hand if you are asking how best to spec your R for residual's sake then the safest option may to choose a hatch rather than an estate.

Discuss.....!

Edited by Wooda80 on Sunday 11th February 11:18

[Dammit]

It’s to replace my now 22 year old 850R- so has to be an estate.

It won’t be a disaster if the car is worth less come sale/trade-in, but you are correct in that taking a balanced view of the future value is sensible.

[Camelot1971]

You can get a brand new Golf R estate via drivethedeal for less than £30k.

[Mo28]

Considering your mileage and that the base R estate comes highly spec'd, I personally would choose a lease. However the link you have provided is stupidly high where a couple of months ago people were paying in the region of £250 - £275 a month + initial rental. I think for a 2 year lease it was coming in at around just over £7000 so in your case for three years you would've been looking at around £10,000 for the term (Consider this as the amount the car will depreciate in three years <- however like someone has said this could change due to the market being saturated with returned leases further down the line).

The issue with finding a good price on a lease is you will have to wait around and when a good deal comes up don't think about it and just go for it.

[ZX10R NIN]

I'd be tempted by the one with 20-30k on the clock you'll have missed the worst of the depreciation & if you're only covering 5k per year the car will have very low mileage for the year which will make them desirable, also you'll still be able to extend the manufacturer's warranty as they should have full dealer history which means you're 20k will land you a car.

https://www.autotrader.co.uk/classified/advert/201...

https://www.autotrader.co.uk/classified/advert/201...

https://www.ebay.co.uk/itm/VW-Golf-R-TSI-DSG/17309...

https://www.ebay.co.uk/itm/2015-Volkswagen-Golf-2-...

https://www.autotrader.co.uk/classified/advert/201...

https://www.autotrader.co.uk/classified/advert/201...

https://www.ebay.co.uk/itm/2015-VOLKSWAGEN-GOLF-2-...

[Toed64]

Wooda80 said:

The R Estate is very much a niche in the overall market, in the grand scheme of things there are not many people who set out to buy a smallish very high performance estate car. The R Estate...
...If you particularly want the Estate yourself then go for it. It's a fabulous car by all accounts and there's little else that offers that particular blend of attributes. On the other hand if you are asking how best to spec your R for residual's sake then the safest option may to choose a hatch rather than an estate.

Discuss.....!

Edited by Wooda80 on Sunday 11th February 11:18

I'm not sure that I agree - quick Volvo estates have always sold better than the saloon variants. Subaru launched a hatch/estate version of the Impreza to meet a demand and carried on making them right up until they decided to make them look like an Astra. Seat has developed a fast Leon estate, the Octavia VRs estate was and is popular and thye made a 4x4 version to meet demand, the A4/S4 quattro estate is not exactly a flop, and the BMW 3 series touring still sells, although most of them are family small-capacity diseasels rather than the rather lovely 6 pots...and they've fitted a part time 4x4 because they are rubbish in bad weather. Merc make several sizes of rapid estate too...

Niche it may be, but it's a big niche and it's growing for people that really don't want an SUV, but have the need to transport surf boards, or family, or bicycles, or dogs.

[Shambler]

My old lease golf r estate is on autotrader at the moment for £20059, it’s black MK65XCB. Been serviced and new brakes. Never missed a beat and well looked after.

[ALawson]

With that milage per year I would buy the only R36 Passat estate on AT at the moment......cannot see that loosing much more and should be fairly reliable.

[Dammit]

I did see that, but I have no idea of the values for those, so have no idea if that’s good money for that car or not.

[ALawson]

I think it is "fair" value, the R36 is like hens teeth although £525 tax per year will be putting some people of, but the boot is probably bigger than a Golf (haven't checked).

I have an Accord Estate Mk7 which is literally huge, although diesel it doesn't have a dpf which is why it was chosen for short 10k annual miles.

I am now looking at another car (not a Golf R), but needs to have a big boot and probably be petrol as I am no longer convinced of the diesel argument with that level of annual miles. Fuel is about the same cost, however you only need a few pdf type bills and that will erode any saving.

The 3.2 Audi S4 estate look good value at £13k ish, the previous 4.2 V8 look like they have ruinous bills associated with belts/chains, rollers etc. when they need doing. I saw a post on here somewhere where Audi AD charged £5k to do that work. Need to do some more research on that engine, or maybe E500/S6 if you can live with the economy.

[Dammit]

I'm going to see the R36 tonight.