Leasing vs Buying New

iwilldoitthistime

Hi there

apologies if this has been discussed before - but Ive hunted and cannot find anything!

Can anyone give me advice on leasing versus buying a new car. My car is coming up to two years old, and I dont know if I would be better getting a lease car to be renewed every two years, rather than buying another new car, which seems to lose quite a lot in the first two years.

I am only looking for something like a Megane, or something similar size.

If leasing is the way to go - can anyone suggest a good company to use??

thanks!

crossleydd42

Firstly, if you buy a used car, the best thing is to buy one about two year's old and sell it at about four year's old. Depreciation levels out during the two years you would have it.

As for leasing one, you need to sit down and work out the cost of buying a new/nearly new car versus leasing one.

So, put down buying/running costs if you buy another one:
Tyres
Vehicle Insurance
Breakdown Assistance Ins
Road Tax
Servicing
MoT
Mech B'down Ins
Depreciation
Interest lost from savings a/c by withdrawing money to pay for car at x%, (You'll find calculators online to do this for you.)
Cost of any loan/part-loan you take out

Then leasing costs:


Rental
Car Insurance
Interest gained by keeping money in savings account @ x%.

Take one total from the other to give you profit/loss. Even if there's a loss, you might get a newer car than if you bought one and you also save the hassle/haggle of selling/buying a car.
Usually, there are no extras to leasing a car, bar having to pay for the unused portion of a tyre which is ruined part-way through its life.

Do bear in mind that the rental charge will very much depend on the vehicle leased and the annual mileage envisaged. A VW may well prove to be cheaper to lease because depreciation will be less on such a quality car. A modest car like a Polo, quite roomy for its size, might be a good possibility. Or a Golf.

I hope this is useful.

nickmack

iwilldoitthistime wrote: »

Can anyone give me advice on leasing versus buying a new car. My car is coming up to two years old, and I dont know if I would be better getting a lease car to be renewed every two years, rather than buying another new car, which seems to lose quite a lot in the first two years.

I am only looking for something like a Megane, or something similar size.

If leasing is the way to go - can anyone suggest a good company to use??

As crossleydd42 says, you need to calculate it for your particular situation.

With leasing, you are basically paying for the depreciation of the vehicle over that period plus some interest. If you are leasing a car that has steep depreciation over the first 2-3 years, it may work out quite expensive.

I have just put in an order to lease a Megane and it's worth getting a few quotes and playing them off against each other. Leasing companies can often contact other financers and ask them to match quotes if you are a good credit risk.

plane_boy2000

If you are looking at a megane size car then teh Audi A3 is well worth a look. I have just picked one up on a PCP for 2 years and am really happy with the deal. After shopping around I found that the A3 was about teh same price as a focus per month, and cheaper than a golf because of the high residual value.

iwilldoitthistime

thanks for the advice everyone!

I usually buy cars new, but realise that they lose so much money in the first two years (usually the time I keep them before trading them in) I thought leasing may be the answer.

the A3 looks great, but I need a 5 door, and there doesnt seem to be one?

peterg1965

There is an A3 5 door, its called the Sportback. Check out https://www.lexfreechoice.co.uk that will give you an idea of PCP costs, this company includes roadtax as part of the price and also has the added option of taking out maintenance contract. Hope this helps.

SemperFi

https://www.contracthireandleasing.com have links to some of the main leasing companies with their best deals.

OrangeProse

Sorry to ask a basic question, but what's wrong with your existing car? How come it needs changing at 2 years old?

It might end up saving you hundreds every month just to keep your current car for a bit longer.

If you're dead set on changing it, why not consider buying a nearly new car - one that is six months to a year old? That way, someone else will have taken the initial depreciation hit.

plane_boy2000

iwilldoitthistime wrote: »

thanks for the advice everyone!

I usually buy cars new, but realise that they lose so much money in the first two years (usually the time I keep them before trading them in) I thought leasing may be the answer.

the A3 looks great, but I need a 5 door, and there doesnt seem to be one?

There is a five door - thats what I have just ordered. They call it the sportback. Its slightly longer than the standard A3 to give more leg room and boot space. PM me if you want and I can give you an idea of what I am paying a month etc.

albionrovers

Personal lease every time for me.

2 year interval.
Never need an MOT.
Never need more than 1 service on a 10000 mile/year lease.
Never need to renew a tax disc 'cos they send u a new one.

https://www.skyfleet.co.uk - my current supplier - BMW 318i SE.
https://www.lingscars.co.uk - has caught my eye recently. Check out the Audi A3.

piggeh

Worth checking on leasing:

what's the payment profile? ie if it states 2+23 then you pay double payment straight up, then 23 monthly payments. Sometimes companies use this to make it look like a lower rental, when in fact it's because you pay more up front in the first month.

Does it include maintenance? Relief Vehicle?

Also ask if they have any vehicles where the order has been cancelled as they knock some money off these as well, if they have any available.

And make sure you match it to your mileage as costs for going over can be huge.