Lease or buy?

the_devil_made_me_do_it

My SIL has just had to scrap her old car. She is now in a quandry about how to get another car.

I don't think she can afford more than £3000 & that'll be either a loan or finance.

She travels about 20 miles round trip to work & then journey's around town. She only wants a small car whic is reliable & cheap to run in terms of fuel, tax & insurance.

Should she buy or lease a car & if so, what small cars do people recommend?

ryanm198

Definatley buy if she's in a position to, she owns the car and do with it what she wants. If she must finance it shop around as on smaller cars you can get some decent finance deals. Not sure if there's any 0% offers at the moment but it's worth a look.

epz_2

A £3k car can be a risk, while you could get a lease for a monthly payment of about and that 3 k will eventually be depreciated to 0 plus cost of MOT's, repairs etc. No point buying a cheap car if it dies after 4 months and leaving you with an outstanding loan.

You can get a 3 year lease for £100(inc vat) a month for a new (small) car with all the manufacturers warranty ect, its not necessary the best option but it is a good way to have a know budget and avoid unexpected bills. It also provides a nice inflation proof bill but is subject to VAT.

Rossy.

epz wrote: »

A £3k car can be a risk, while you could get a lease for a monthly payment of about and that 3 k will eventually be depreciated to 0 plus cost of MOT's, repairs etc. No point buying a cheap car if it dies after 4 months and leaving you with an outstanding loan.

You can get a 3 year lease for £100(inc vat) a month for a new (small) car with all the manufacturers warranty ect, its not necessary the best option but it is a good way to have a know budget and avoid unexpected bills. It also provides a nice inflation proof bill but is subject to VAT.

This perception really annoys me

Why do people believe cheaper cars are complete bangers?

I've had many run arounds that have lasted longer than i ever intended owning them.

spending 10k on a car doesn't mean it's going to be trouble free.

spending £500 could give you a car that's got 10 years left in it. All that matters is thats it's been properly looked after and had it's required services etc

epz_2

Yeah, fair play but small cars have the potential to get thrashed a lot harder than 2-3 litre diesel which spends most of its life on a motorway. Not to mention the teenage element paying over the odds for small cars ad kicking the hell out of them.

A new car is always going to be better than a 5 year old car as its not been sitting out in the snow/rain with bits rusting.

The big problem is people who buy cheap cars and have to borrow to do so are most at risk if the car fails, buy two lemons in a row and it could cause big problems for some people. Good financial planning is just as much about risk mitigation as it is paying the lowest possible amount if all bets pay off.

gilbert_and_sullivan

Spend less than a grand, get something like a Hyundai Accent, Toyota Corolla or similar and enjoy no debt motoring till it breaks, might well be years, rinse and repeat.

Hard times coming, we ain't seen anything yet, keep away from loans and leasing.

neil_s

My guidance for buying a car is as follows:

1. Once you've chosen your model, get the highest and rarest spec possible. This makes a massive difference when it comes to depreciation.
2. If you live in a city like London where prices are higher, don't be afraid of travelling for the right car. The price differences are quite amazing.
3. If going a small car, try and get something that's done about 8-12k per year. Anything less than this and it's probably been driven in a city, and as such the clutch and power steering pump will be shot. If it's got a reasonably big engine, don't worry if it's a high miler, as they'll be motorway miles.
4. Go for something that's been looked after. Obviously get something with full main dealer history, but also look for things like receipts being kept, if the alloys are kerbed, swirl marks on the paint, etc etc.
5. Don't pay the asking price!

Stick to these rules and you're onto a winner. I haven't lost any money in depreciation of my cars ever, and I've made money on most of them. A car purchase shouldn't be like buying a washing machine it should be like buying a house: buy and sell at the right time and you should make money.

IMO for your budget something like the car linked to below is ideal. It may be a tiny bit more to insure than a Micra or whatever, but sell it in a year to 18 months and you'll get what you paid for it.

h ttp /w ww .a utotrader.c o. uk/classified/advert/201101376755155/sort/priceasc/usedcars/price-to/3000/price-from/2000/maximum-mileage/up_to_80000_miles/model/a3/make/audi/radius/1500/keywords/leather%20/postcode/m146ud/page/1?logcode=p

Hope this helps!