Opinions on buying v leasing

SusieWinwood

The time has probably come to gracefully retire my DH W reg Astra Auto. Its just done (on Sat) 100k miles and is in pretty good nick both bodywork wise and inside.

We are seriously looking at the possibility of leasing rather than buying.

I really really fancy the Nissan Note (depending on cost) to lease over 5 years. We have minimal cash to deposit but will part ex the Astra.

Does anyone have any experience with leasing? Have you found it good/ or bad?

Any recommendations of places to rent from?

We are in Bolton/Wigan area

TIA

Susie

LandyAndy

The moneysaving advice would be to keep your Astra but I don't suppose that is what you want to hear.;):p

There is a poster on here called AdrianHi who might be worth PMing as he has done quite a bit of work on the various car buying/leasing options.

AdrianHi

Got your PM
I've not been on much lately, new job (contract) and been busier than usual.
My "knowledge" on leasing deals is usually out of date within weeks. There was a period 1 to 2 years ago when cars like Vauxhalls and some Nissans were such good deals as a lease it did not make sense to buy them new. Leasing firms getting big discounts coupled with cheap finance. Finance deals are not so good today so it's harder to find the bargains.
My approach to costing a car is to look at it's average monthly cost over the period you plan to have it and compare with alternatives. Depreciation is the real cost, not the purchase price. When you do this you can look at any way of financing the car including leasing. Leasing sometimes stands out as the best option if your buying new or young cars because depreciation is not your risk, car is under warranty so no surprise costs. You are tied in for the length of the lease with is typically 36 months, sometimes 24 months but I've not seen a 5 year lease deal. I wouldn't want finance outstanding on an out of warranty car personally.
What car web site, navigating into the specific Nissan Note model you interested in and follow the "Lease this car" link and you'll find the lease deals I normally look at. Remember most prices are ex. VAT which you will have to pay and VAT might go up to 20% sometime soon.
Compare all lease payments with the cost of depreciation on the car, see depreciation calculator on the what car web site. Not a guarantee but the best you can do. Compare leasing with a PCP deal which has similar low deposit and low monthly payments to leasing.
I'll take a look some more over lunch time, will need to get back to work for now.

sheslookinhot

Is your monthly payment really the depreciation ?

daveyjp

5 years is far too long for a lease car. What will you be doing in 5 years time? Lease cost will probably be high as the lease cost does reflect the value of the car at the end of the period. A 5 year old Note may be worth 25% of the initial cost - you will pay the 75% (and some) over the five years.

Hintza

OP, dave raises a very good point. In my view if you lease you want to lease for the shortest period of time to get good value over a pcp or hp deal. You might not have a job in 5 years time and still be stuck with the lease car and the normally penalty for early termination is six months of payments.

I haven't done any sums but I reckon it will be cheaper buying the car (experience with a Quashquai a year or so back). I have stopped leasing this year because the deals are just not there anymore.

My one comment is if you want value in a lease you must pick an unfashionable or a car about to be replaced with a new model or a big car/4x4.

AdrianHi

sheslookinhot wrote: »

Is your monthly payment really the depreciation ?

Monthly lease payments are made up of projected depreciation for the car over the term of the lease, a finance charge on the whole value of the car, a margin for the lease company out of which they have to cover their expenses and profit.
If a lease company can get bigger discounts on cars than you can as an individual due to the volume of cars they purchase they can pass on some of this saving to their customers in the form of low lease payments. many lease companies resell finance from banks and other financial institutions and get a commission.
Cheap finance + big discounts and you get a cheap lease deal.
Cheap finance and big discounts are not so obtainable today compared to a couple of years ago so you have to do what Hintza suggests, go looking for the deal and not the car and find that out of favour car model that the manufacturer is looking to off load, perhaps because they have a new version of the model coming out.
PCP deals may well be a better way to go right now, the sums need to be done.

SusieWinwood

Many thanks all

I'll pootle over to what car now Adrian - thanks

Mark_Hewitt

My wife is considering this exact issue
Either,
- Buy new - Unlikely it's an expensive way to go
- Buy 1 year old - Much cheaper as the 1st year depreciation is out of the way
- Buy new via lease - Now she is self-employed and I believe that she can offset all or part of the lease payments against tax. She pays standard rate tax so this she effectively pays up to 20% less than the lease payments.