Is it better to buy or rent?

iwant2renovate

I'm debating selling my current car, banking and saving the money and then entering a 3 year deal to hire a smaller very economical car for less than £200 per month where I will only pay for my own insurance and only 2 services during the contract period, my annual milage and then some more is already taken into consideration. How right is the phrase "if it appreciates own it, if it depreciates rent it"??.

Kilty_2

iwant2renovate wrote: »

I'm debating selling my current car, banking and saving the money and then entering a 3 year deal to hire a smaller very economical car for less than £200 per month where I will only pay for my own insurance and only 2 services during the contract period, my annual milage and then some more is already taken into consideration. How right is the phrase "if it appreciates own it, if it depreciates rent it"??.

Well you're paying for the depreciation in the lease - but the upside is you'll have a new car every 3 years and your car will always be under warranty.

Do you do a high annual mileage?

iwant2renovate

My place of work is changing to a place some distance from home so probably anywhere between 17000 and 20000 miles per year. My thoughts are the depreciation on my current car, its poor fuel efficiency, high annual tax cost, higher insurance cost and increased service costs (due to increased wear and tear) will probably cost me in total slightly less per month on average than the monthly lease on something that is under warranty and will be replaced every 3 years. Its just a case of getting into a mind set of never owning. Although I will save the money from my owned car if I sell it.

Kilty_2

Would be looking at something like a Passat Bluemotion for those kind of miles - so more economical but less of the small.

Leasing with that kind of annual mileage will be quite expensive. Does your employer have any kind of company car scheme that would help with the costs?

Hintza

You need to do a lot more research. I very much doubt you will find a lease to beat buying the car outright and as was pointed out above are you sure you want a "small" car for your high mileage.

Small lease cars that are popular are normally more expensive than buying the equivalent (no big manufacturer discounts to help lower the monthly costs).

Lithian

£200/month for 3 years is a total of £7200

Current shape 57 plate mondeos are coming in at around that price, with maybe 50k on the clock. You could drive it for 3 years and flog it for £2.5-3k. These things are ideal for long distance commuting and will just soak up the miles.

It *shouldn't* break down since it still wont be an old car by the time you sell it. However lets budget £1000 for some new tyres, MOTs, brake pads and whatnot that you might avoid with a brand new car.

So you have
Option 1) New small car on a lease
Option 2) Nicely worn in decent sized car and £2k in your pocket after 3 years
Option 3) Pay a shed load of money on a brand new decent sized car :rotfl:

For me option 2 is the way to go but if you can't be bothered with servicing and MOT centres i can see why lots of people choose option 1, but £2k is a fair incentive to bother with these things.

simonnorman

I think this is a very interesting debate because although I really believe that leasing is usually much better, I also agree with Hintza that it is often more expensive to lease a small car than buy it outright. That's because of the residual value on small cars which tends to be lower than bigger cars. However, you may find some very interesting special deals for sub-£200 on small or even medium cars. You need to check out the comparison engines for car leasing to check out the best leasing deals. Just type best car leasing deals in Google and you should find some good deals!

edwrai

I would always rent as it you avoid all the problems of re-sale of the vehicle after it had its time.