Which option should I choose?

[ArkadeSpotter]

Hi everyone,

I am looking for advice on which of these options you think would be best. We have 1 car currently roughly worth 10k if sold and 10k from the sale of the second car which we no longer needed. We have decided we both like the look of the Cupra formentor but we have several options of how we could fund this

> NHS Salary sacrifice leasing scheme - This would be the 204 EHybrid V2 Option, 7k Miles per year for 3 years with no deposit. Put the 20k (after sale of current car) into an ISA and savings. Cost roughly £380 pm plus pension deductions (roughly £45 pm)
> NHS Motorinifity - Buy new with current deal for 1.5 TSI 150 V2 starting from £27,581
> Wait 8-12 months and buy the 1.5 TSI 150 V2 second hand (Current cheapest on autotrader is £27,999 for 21 plate with11.5k miles)

Thanks all

[jrock78]

I Would think very carefully about option 1 using the NHS salary sacrifice scheme as it affects pension contributions and you could affect your career average pension payout when coming to retirement.

[ArkadeSpotter]

Thanks for the reply, the NHS salary sacrifice isn't something i think we'd be looking to stick with deal after deal and more likely just be a one off. Hopefully if it's what we went with it wouldn't have too much of an impact on our pension

[CG2020UK]

I know it’s only the 150 engine but how about private lease so as to leave your pension untouched?

https://www.leaseloco.com/car-leasing/cupra/formen...

Seen a few in the flesh and they look brilliant.

[ArkadeSpotter]

Not something I had considered but that would be nearly £17k for 4 years with nothing to show at the end of it. I could buy brand new for £27k with a £10k deposit and after 4 years I can't imagine it would only be worth £10k?

I've looked at leasing in the past but I can't ever see how it is value for money unless I'm missing something.

Thanks

[Pistonheader101]

Do you really need a new car or is the current one fine?

[Pica-Pica]

ArkadeSpotter said:

Thanks for the reply, the NHS salary sacrifice isn't something i think we'd be looking to stick with deal after deal and more likely just be a one off. Hopefully if it's what we went with it wouldn't have too much of an impact on our pension

Anything that affects your pension, especially with tax relief attached, has to be a No-No. Of all the financial considerations in life, maximising your pension contributions and tax relief is the most important.

[ArkadeSpotter]

Pistonheader101 said:

Do you really need a new car or is the current one fine?

Not necessarily but we're lucky enough to be in a position were we can afford a new car and enjoy it. Plus if we ordered today with delivery times it's not going to be well into next year before we got the car.

[CG2020UK]

ArkadeSpotter said:

Not something I had considered but that would be nearly £17k for 4 years with nothing to show at the end of it. I could buy brand new for £27k with a £10k deposit and after 4 years I can't imagine it would only be worth £10k?

I've looked at leasing in the past but I can't ever see how it is value for money unless I'm missing something.

Thanks

I only suggested it as an option as it matches the NHS lease you are considering without your pension being hit.

A low interest personal loan is always my preferred choice.

[Mandat]

ArkadeSpotter said:

Not something I had considered but that would be nearly £17k for 4 years with nothing to show at the end of it.

This comes up every time when talking about leasing.

Of course you will have something to show for it. Not much different to if you bought a car outright and kept it for 4 years.

[ArkadeSpotter]

Mandat said:

This comes up every time when talking about leasing.

Of course you will have something to show for it. Not much different to if you bought a car outright and kept it for 4 years.

How? If i bought a car for £27k in 4 years time i would be able to sell it and get X amount. If i lease that's £17k with £0 at the end. I can't see a brand new car depreciating by more than £17k in four years?

[CG2020UK]

ArkadeSpotter said:

How? If i bought a car for £27k in 4 years time i would be able to sell it and get X amount. If i lease that's £17k with £0 at the end. I can't see a brand new car depreciating by more than £17k in four years?

You suggested the NHS lease which would have hit your pension.

Considering your new it is looking like you are trying to bait people into a lease/finance debate.

[Mandat]

ArkadeSpotter said:

How? If i bought a car for £27k in 4 years time i would be able to sell it and get X amount. If i lease that's £17k with £0 at the end. I can't see a brand new car depreciating by more than £17k in four years?

You've answered your own question, although perhaps you don't realise it yet.

By way of example:

• Buy car outright for £27,000 & sell for £10,000 after 4 years. Cost for use of car = £17,000 or £354 per month.

• Lease a car for 4 years & hand back at end of term. Cost for use of car = £17,000 or £354 per month.

Obviously, you can vary the costs for each option to make one more cheaper or expensive than the other, but the actual costs are not really relevant, as it is the principle that is being demonstrated.

In addition, the example you give of having £X amount after selling, rather than having £0 at the end of a lease, occurs because the £X amount is your own money that you had to put in originally at the point of purchase. You are only getting your own money back, that you have had to tie up as equity in the car over the 4 year period.

With a lease, you get nothing back at the end because you put no equity in at the beginning.

[ArkadeSpotter]

Mandat said:

You've answered your own question, although perhaps you don't realise it yet.

By way of example:

• Buy car outright for £27,000 & sell for £10,000 after 4 years. Cost for use of car = £17,000 or £354 per month.

• Lease a car for 4 years & hand back at end of term. Cost for use of car = £17,000 or £354 per month.

Obviously, you can vary the costs for each option to make one more cheaper or expensive than the other, but the actual costs are not really relevant, as it is the principle that is being demonstrated.

In addition, the example you give of having £X amount after selling, rather than having £0 at the end of a lease, occurs because the £X amount is your own money that you had to put in originally at the point of purchase. You are only getting your own money back, that you have had to tie up as equity in the car over the 4 year period.

With a lease, you get nothing back at the end because you put no equity in at the beginning.

Your argument that the car will be worth £10k after 4 years isn’t really valid though. Go on autotrader and there are 21 plate Cupra formentor V2 still going for £28k so how after 4 years will it be worth £10k? Anything above £10k will be more money to put down as a deposit on the next car no?

[TheDrownedApe]

[Mandat]

ArkadeSpotter said:

Your argument that the car will be worth £10k after 4 years isn’t really valid though. Go on autotrader and there are 21 plate Cupra formentor V2 still going for £28k so how after 4 years will it be worth £10k? Anything above £10k will be more money to put down as a deposit on the next car no?

I'm not arguing anything about car values. The actual values are irrelevant.

The example simply shows that irrespective of whether you buy outright, lease, PCP, HP, bank loan, etc, the final outcome will be generally the same; i.e. you'll have paid £x to own/use a car for y period of time.

[ArkadeSpotter]

Mandat said:

ArkadeSpotter said:

Your argument that the car will be worth £10k after 4 years isn’t really valid though. Go on autotrader and there are 21 plate Cupra formentor V2 still going for £28k so how after 4 years will it be worth £10k? Anything above £10k will be more money to put down as a deposit on the next car no?

I'm not arguing anything about car values. The actual values are irrelevant.

The example simply shows that irrespective of whether you buy outright, lease, PCP, HP, bank loan, etc, the final outcome will be generally the same; i.e. you'll have paid £x to own/use a car for y period of time.

Well of course, I didn’t expect a car for free. But values are relevant as that’s how much you’ll be paying for the car.

[nick1871]

Mandat said:

I'm not arguing anything about car values. The actual values are irrelevant.

The example simply shows that irrespective of whether you buy outright, lease, PCP, HP, bank loan, etc, the final outcome will be generally the same; i.e. you'll have paid £x to own/use a car for y period of time.

He is trying to work out which is the best way of buying/leasing this particular car. How can the actual values be irrelevant? This is all about the figures!

I would go with the buying option with the cheapest loan available or a PCP, whichever looks best on paper. My last two cars were PCP’d and have done well out of them.

Edited by nick1871 on Saturday 8th October 09:02

[ArkadeSpotter]

nick1871 said:

Mandat said:

I'm not arguing anything about car values. The actual values are irrelevant.

The example simply shows that irrespective of whether you buy outright, lease, PCP, HP, bank loan, etc, the final outcome will be generally the same; i.e. you'll have paid £x to own/use a car for y period of time.

He is trying to work out which is the best way of buying/leasing this particular car. How can the actual values be irrelevant? This is all about the figures!

I would go with the buying option with the cheapest loan available or a PCP, whichever looks best on paper. My last two cars were PCP’d and have done well out of them.

Edited by nick1871 on Saturday 8th October 09:02

Think we’ve decided on getting a personal loan and going through NHS Motroinfinity. Will be waiting over the next few months however to see what happens with interest rates. But thanks Nick!

[J1990]

ArkadeSpotter said:

Think we’ve decided on getting a personal loan and going through NHS Motroinfinity. Will be waiting over the next few months however to see what happens with interest rates. But thanks Nick!

Just checking in here, have you actually test driven the formentor yet? I only ask as I was really taken by the looks but upon a test drive I absolutely hated it and ended up leaning towards the Cupra Ateca isntead - Though ended up buying something else in the end as the lead times were too long but that's the same for almost all cars currently.