New Cars - is Leasing going to become the new norm?
Discussion
Just watching the leasing thread and also the amount of really decent leasing deals that pop up on hotukdeals now and it got me thinking - is the market here moving more towards the american model whereby the vast majority of new cars are leased?
I know the most popular format at the moment is probably PCP deals but there are disadvantages to that for both the customer and the finance company, and i'm hearing more and more adverts for monthly deals that end with "there is no option to own the car".
After all, if you buy a new car and you change it every three to four years, does it really matter if you dont "own" it, particularly if its an everyday workhorse?
I know the most popular format at the moment is probably PCP deals but there are disadvantages to that for both the customer and the finance company, and i'm hearing more and more adverts for monthly deals that end with "there is no option to own the car".
After all, if you buy a new car and you change it every three to four years, does it really matter if you dont "own" it, particularly if its an everyday workhorse?
kambites said:
Leasing (and/or HP which is never paid off in full) has been the norm for years. I'm pretty sure that well under half of cars are ever fully owned by their first keeper.
I'm talking about the move to straightforward leasing, rather than buying on HP / PCP deals.Is the general public ready to make that step from "well i'm paying it off" to "i'm effectively renting it"?
I'd say currently 90% of new cars are never fully owned by their first keeper.
Gio G said:
A very big disadvantage of leasing is if your car is stolen or written off within the first few months of ownership.
My experience is that my hot Golf R deal ended up costing allot more than I hoped. Chances of it happening is low, however PCP with GAP negates that risk.. Those big upfront payments will never be insured, unless someone introduces new products to the market..
G
You can get GAP insurance or leasing.My experience is that my hot Golf R deal ended up costing allot more than I hoped. Chances of it happening is low, however PCP with GAP negates that risk.. Those big upfront payments will never be insured, unless someone introduces new products to the market..
G
kambites said:
daemon said:
I'm talking about the move to straightforward leasing, rather than buying on HP / PCP deals.
My point was that there's no real difference between the two unless you actually pay the balance at the end and most people don't. Most people who PCP/HP treat it as a lease anyway. 
Just wondering if it will become the new norm.
TheAngryDog said:
While I like owning cars, if I could get approved for leasing and could afford the monthly payments on something interesting (F10 M5 for instance) then I'd have to seriously consider it I think.
What about something like this for £350 a month??http://www.hotukdeals.com/deals/jaguar-xf-3-0-v6-s...
btcc123 said:
In todays society everyone wants new and wants it now so not all but most people that lease a car because they have not got the money to buy new so lease a car as they can afford it as they have a good monthly income and at the end of the day leasing a car for £250 a month is the same as £80 for Sky.
Its not that they think "I havent got the money for a new car, but i really want one so i'm going to lease it", they think "For £250 a month I can get this new car...."Subtle difference.
r11co said:
daemon said:
nicanary said:
What happens when you retire and you're on a much lower income? Where does the cash come from to buy the retirement car?
From all the money you saving on not suffering massive depreciation on new cars?nicanary said:
I don't want anyone to think I'm knocking lease deals - they suit some people. I do 25/30k a year, so it's out of the question for me. But society has changed - nobody saves any more, and few people have adequate pension provisions. Personal debt is higher than ever, and nobody seems to worry about it.
If a 40-year old person leases a car at £300 pm, they will also have to save £100pm for 20 years, so when they retire at 60 they have £24k to buy a car, probably the equivalent of a base model Ford Focus. Unless of course they have such a large income on retirement that they can continue to lease.
If you rent a house, and have limited income, the Gov pays you housing benefit. They won't pay for your car.
Its this sort of mentality i dont get?If a 40-year old person leases a car at £300 pm, they will also have to save £100pm for 20 years, so when they retire at 60 they have £24k to buy a car, probably the equivalent of a base model Ford Focus. Unless of course they have such a large income on retirement that they can continue to lease.
If you rent a house, and have limited income, the Gov pays you housing benefit. They won't pay for your car.
What are you suggesting is otherwise done? Haemmorage £30K into a new car every three years and watch it turn into £15K then rinse and repeat just so you have enough equity to buy a new car when you retire or are you suggesting buying a used car, because oh look, Mr Retired Leaser can then do that anyway?
nicanary said:
I get your point. I'm dubious whether someone who's been driving something classy for the last umpteen years will be happy buying a shed for the rest of his life.
I don't get knocked by depreciation - I buy a 1-year old car with lowish mileage and known provenance, keep it 3 years, and then trade in for another. No cash added. At retirement I will either keep it and run it into the ground, or trade in for a small city-car. I've never owned a car more than 4 years old, and I don't feel any sort of need to buy a new one anyway. The cars I buy are still under warranty.
Again, projecting your prejudices and mis-beliefs onto someone else to justify your point.I don't get knocked by depreciation - I buy a 1-year old car with lowish mileage and known provenance, keep it 3 years, and then trade in for another. No cash added. At retirement I will either keep it and run it into the ground, or trade in for a small city-car. I've never owned a car more than 4 years old, and I don't feel any sort of need to buy a new one anyway. The cars I buy are still under warranty.
Do you really think there is going to be a First World problem in the future when retired people have to slum it in used cars instead of leased 3 series? Oh the humanity!
wemorgan said:
"New Cars - is Leasing going to become the new norm"
6 pages in and it seems as if the answer is, no leasing wont become the new norm for all the reasons that have been discussed.
Leasing is just another choice that consumers have been given that wasn't previously available. it clearly wont suit all.
I think its a lot closer than you think. Those nay sayers on here dont buy new cars anyway, so hardly representative.6 pages in and it seems as if the answer is, no leasing wont become the new norm for all the reasons that have been discussed.
Leasing is just another choice that consumers have been given that wasn't previously available. it clearly wont suit all.
I dont think its necesarily a bad thing. It keeps new cars coming onto the used market, and people who want a new car get a decent deal without having to worry about trade ins / selling privately / etc,etc
Justin Case said:
Look at the other end of the market and the sums work the other way round; I went by the local Fiat dealer on the way home and they had a new Panda at the front, £99 down and £99 per month (didn't say what the period was though) A decent secondhand Panda will only cost about £4k less than a new one so no great saving to be had there (in Mercedes terms 
so leasing/PCP looks a no-brainer.
On the other hand a decent secondhand E class can be had for £15k, a saving of £25k on new, and that has to be covered by the original owner or leasing company one way or another.
So perhaps leasing will be become the norm for cheaper cars rather than expensive ones, or am I making the mistake of believing that folk think logically
It'll become the norm on exec stuff first, simply because of the amount of hard cash it would take - or a massive repayment loan - over three years to buy it outright, as opposed to a couple of hundred a month on a three year loan for a new panda. so leasing/PCP looks a no-brainer.On the other hand a decent secondhand E class can be had for £15k, a saving of £25k on new, and that has to be covered by the original owner or leasing company one way or another.
So perhaps leasing will be become the norm for cheaper cars rather than expensive ones, or am I making the mistake of believing that folk think logically
projectgt said:
The thing is, most people don't 'think' about it, they just do it.
Don't get me wrong, lease deals make a lot more sense these days, infact there are some genuinely good deals to be had even when someone weighs it up vs an outright purchase.
Buying new outright makes most sense when one plans to keep the car many years.
Again thats just projecting what you think other people think onto other people.Don't get me wrong, lease deals make a lot more sense these days, infact there are some genuinely good deals to be had even when someone weighs it up vs an outright purchase.
Buying new outright makes most sense when one plans to keep the car many years.
Buying a car is a big decision for most people, and its not generally something done on a whim.
I think people have a certain budget in mind that they're happy paying monthly and they buy accordingly. They dont think "s
t i really want a new 320d buy i cant afford to buy it outright so how can i get one?"Chris Hinds said:
Do you save £300 a month for 36 months and buy a new car for cash in 2018 or do you pay £300 a month and lease it now.
Your £300 a month saving for three years totals £10,800. Enough to buy you a KA, or a FIAT 500 new.£300 a month leasing can get you some quite heavy duty machinery.
chrispmartha said:
I work hard and lease a car, not sure why it bothers some though.
They think you cant "afford" it and are in some way driving a car beyond your means solely to impress the neighbours and fool yourself into thinking above your station with regards to class, when clearly you havent even got a pension sorted out and are going to be left without a car to drive when you retire.I think that sums up the mindset of a few.
nickfrog said:
While neither of us know, I would tend to agree but we don't know what the delta is - and they must dedicate a good chunk of the gross margin for their own operating costs / capex / profits, otherwise lease deals would always be cheaper than cash. Which in my experience they can be (Mercedes), but not that often compared to cash deals when bought properly (often through brokers that are also leasers incidentally).
The Qashqai for us was the obvious one and hopefully the M135i will be the same if the trend carries on as at no point a M135i was ever cheaper than buying cash. Some flip them yearly and yielded £175/month depreciation, so high are the discounts and so few are people paying cash.
Fair point. The Qashqai for us was the obvious one and hopefully the M135i will be the same if the trend carries on as at no point a M135i was ever cheaper than buying cash. Some flip them yearly and yielded £175/month depreciation, so high are the discounts and so few are people paying cash.
Tractor lad said:
The funds were saved many years before so impossible to say but all reasonable, cash bought motors; a two year old 335d preceded the M135i.
It doesn't bother me; what does irk me is those that are so insecure about their decision to rent/buy on the never never that they must basically call those that use cash "idiots."
They aren't, they are usually fully aware of all options and could lease/PCP. I bet the majority of leasers/PCP people couldn't buy with cash.
I'm sure they'll be a stampede of disgruntled leasers claiming they could buy a new F12 if they wanted but instead chose to rent a small hatchback.
Really? Funny because if you look back at the thread, the bulk of negative comments tended to be back handed anti leasing comments. In fact it only took to response number 3 for that to happen.It doesn't bother me; what does irk me is those that are so insecure about their decision to rent/buy on the never never that they must basically call those that use cash "idiots."
They aren't, they are usually fully aware of all options and could lease/PCP. I bet the majority of leasers/PCP people couldn't buy with cash.
I'm sure they'll be a stampede of disgruntled leasers claiming they could buy a new F12 if they wanted but instead chose to rent a small hatchback.
I dont lease, never had, and probably wont in the forseeable future either. The concern for me is if you had a drastic change of circumstances they can be costly to get out of.
One of my cars is on straighforward repayment car finance, the other bought with cash.
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