Sunday 21st January 2018

PH Service History: To lease or not to lease?

'For that price, you could get a...' is one of the most bandied-around phrases on PH. So, let's see how true it is.

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It's no secret that heaps of new cars are being sold (or should that be 'sold'?) on personal lease deals these days. And of course, the erudite readership of PistonHeads is frequently sensible enough to question the logic of owning a car in this way.

If one totals the cost of a full lease term, it's a remarkable amount of money - effectively, as we know, you're paying for the depreciation on the car while you use it without ever owning it. The positive is that this puts a choice of tempting new machinery within the reach of those who wouldn't otherwise stand a chance of affording it.

The downside, of course, is that spending that chunk of money on something used instead makes more sense financially - not least because you get to keep it longer than two years, should you wish, and even if you choose to get rid at that point you'll get some of your money back. And that seems like as good a reason as any to posit a few alternatives to some of the most popular new car lease darlings.

Let's start with the Volkswagen Golf R, shall we? Seemingly loved and loathed in equal measure by PHers, the hot Golf has become hugely popular thanks to some extremely tempting lease deals. This one, over on our sister site What Car?, will sit you behind the wheel of a Golf R for an initial rental just shy of two grand and monthlies of £326.80. That works out at a total cost of £13,398.

Now, for that you could find your way into a Mk5 Golf R32, but that seems a little... well... obvious, doesn't it? Instead, I rather fancy this hawkeye Impreza Type UK, with just 38,000 miles and a whopping great history. Yes, it's used, but barely, and it's a chance to own a proper legend of a car with the performance potential to rival that new Golf. And of course, you get the same four-wheel-drive all-weather ability.

Fancy something a little more potent? Course you do. How about a BMW M4? Another easy leaser, the M4 can currently be head with a down payment of £3277.38 over on What Car?, with monthlies of £546.23. Which is lovely, but for the £22,000 or so that three-year lease will cost you, you could get into a very tidy, low-mileage example of an E90 M3. And let's face it: that's just better, isn't it?

Take this one, for example: delightfully subtle looks, impeccably maintained, and mileage so low you could mistake it for a brand new example. Yes, it's on for £22,995, but I'm sure a bit of haggling would get it down to the cost of that M4 - and you'd get to keep it after three years. Which, let's face it, I reckon you'd want to.

But perhaps sir or madam fancies something a little more family-oriented? Don't think for a moment that means going without a few toys, though, because a large part of the reason you see so many Range Rover Sports flying around the place these days is their leasability. (Is that even a real world? Probably not. I'm using it anyway.)

Anyway, a Rangie Sport (or a Sporty Range, whichever you prefer) in the 'right' trim - 3.0 SDV6 HSE seven-seat, in my book - can now be yours for a down payment of £4,568.33 and a monthly rental of £761.39. As an aside, I can think of a fair few very nice ways of doing a big, luxurious family car for that down payment alone, but let's stick with our premise here and see what we can come up with for the £31,000 that total lease will set you back.

I was all set to throw you a common-or-garden diesel SUV here; something like an older Range Rover or a nice BMW X5. But then I spied this Audi Q7 V12 diesel for sale, and as this is PistonHeads, I simply had to give it a mention. These come up vanishingly infrequently, so even though it'll cost you the earth to fuel, and it's older and leggier than most of the other Q7s going for around its price, it's still a deeply appealing thing.

Before you're shot of me, here's just one more example. I've gone a little bit silly for this one, so you'll have to forgive me, but the fact is you can of course rent a bona fide supercar these days - and where would we be without the Audi R8 and its utterly delicious V10 engine? One of these will set you back £12,088.38 - that's just the down payment - with your monthlies over three years coming out at £2014.73.

All of which means a stonking total of £82,603.93 for the privilege of borrowing someone else's R8 for three years, and for the same money you could have your very own previous-generation V10; this one's barely two years old, has done a vanishingly small 13,000 miles, and I reckon it'll still be worth £60,000 or thereabouts in three years' time. No contest, really, is there?

[Wills2]

We don't need another stupid thread about leasing and pcps, it has been done to death.

Don't you read your own forum?

[Wills2]

Deep said:

Apologies if I've misunderstood but

£120 a month onto the price of £480 = £600 .
£600 + vat = £720 per month

Upfront payment = £6480.

Total cost over two years = £23040.

I've just paid £46k for a 6 month old car. I doubt the car will lose 50% of its value in 2 years to equal the £23k in rental payments.

I admit there is an opportunity cost though.

Once again apologies if I have misunderstood.

Don't be so sure, the market doesn't like large 4 door petrol cars at 2-3 years old they take one hell of a beating during that time, I lost 26k in one year on an M5 that was 66k discounted from a list of 82k as an example.

The lease cost gives a clear indication of the depreciation they expect.