To Lease or not to Lease

[joestifff]

I cannot for the life of me get my head round this. I think it is because I am fairly risk averse.

I currently have a 2016 GTD estate, it is a nice car, but come January I will be doing less mileage. I am finding the GTD a bit small, plus I am not a fan of diesels.

I bought it 18 months ago using savings and a loan, which has 23 months left and is more monthly than the prospective straight lined lease payments.

I have seen a deal I can get for an A4 Avant 40 TFSi Black Edition. in the colour I want too! Basically for £380 month straight lined, for 3 years.

So theoretically, I can sell my Golf, pay off the loan, be no worse off cash flow each month, not have to worry about warranty or RFL, but about return conditions, excess mileage etc.

Financially, the current loan is not an issue, we as a family are not struggling financially, spare cash end of the month etc, jobs as secure as can be in the current climate.

The only plan we have is to move in 2-3 years. But either way I would have probably traded in the golf by then to buy something else, and extended the loan possibly.

We have two young children.

For some reason, I cannot get my head round that although not financially better or worse, I would have a new more superior car on my drive for the same outgoings! As you can tell I have never leased before.

I really don't know what to do! Never been so indecisive about something in my life!

[joestifff]

Sarnie said:

"I would have a new more superior car on my drive for the same outgoings!"

......but have no ownership of the car. You currently own your current car.......once the loan is repaid will be costing you nothing......which you could sell and recoup funds back.

One of the issues with leasing I've come across as a Mortgage Broker is that clients can't end the agreement even if they wanted to give the car back and pay up the agreement in full......it seems the lease companies just simply said that wasn't possible....

And I think this is the crux of my thinking. Not the lack of ownership, I am not bothered by that, but the ability to recoup anything AND more importantly to me, the ability end an agreement.

Fitting that you reply, as if a house came along, and we just missed it due to affordability I would be furious.

And the first line in your quote makes me sound a bit pretentious, which I am a smidge embarrassed about.

Thanks Sarnie, good to have your input.

I presume a more financial sensible option is to buy second hand, as I have prior, I have mentioned in previous threads I am not a fan of owning new cars. But you cannot argue that leasing does seem to be easier on the old monthly outgoings!!

[joestifff]

otherman said:

So you pay out £13,680 and at the end of three years you own nothing? I really don't get these deals. It's just such an expensive way to run a car. I think you did right with the Golf last time.

I agree, scary numbers.

However, I dare say that over a three year period, my Golf will have devalued by around £8,000, as by then it will be nearly five years old with 80,000+ miles on it. Add in a few hundred quid in RFL, and possibly a bit of money on out of warranty repairs, and although not up to £14,000 spent, I bet I can hit £10,000 spent easily! Add to that the shocking price I will get at trade in, or having to deal with idiots on eBay, Autotrader etc, I am sure I am not far off!!

Obviously if I had bought an older Golf initially, these figures would be lower.

[joestifff]

Thanks for all the replies, all useful, and interesting to hear peoples opinions on the matter.

I have decided to keep the Golf for longer and not lease, and possibly look at either BMW 340i Touring in a year or two, or an S4 Avant, these are types of cars that I presume never or exceptionally rarely come onto lease deals. I will be debt free, and own the Golf outright, so use this as a trade in, with a small bank loan to finance the remainder. Or do what I used to do, and run a shed! But with children, and the requirement for a working safe car, this may be less likely!

That's the plan... Maybe! Things change!

However, my wife is making noises of wanting a new car, she normally pays cash for them, usually around 1-3 years old, no loans etc. She has recently started doing very minimal mileage, so may look at lease deals for her, but not follow the car, but follow the deal!

My opinion from this thread, is that if you are not picky about the car, and enjoy the newness, leasing can be more beneficial than PCP or 2-3 year old cars. But not always. Have to way up the merits of every deal etc. Some people just don't want a new car (myself included) but you cannot escape the fact that some deals can be cheaper than running an older car!