cash purchase or leasing scheme?

Scottish_Driver

In advance, I will ask for your forbearance as I am sure there have been several similar posts and requests to this - I am doing my best to wade through the forums and find any that have been made already.
I am thoroughly confused about how to purchase a new car for myself - should I buy a second hand one outright or should I be considering going to a dealership and taking out one of the monthly payment offers they all seem to offer?
I have £6000-£7000 cash that I can spend on a car (I have not even decided what kind of car I want yet!) I was all set to buy a used vehicle, perhaps four years old and that would have been that.
However, I have been hearing from lots of my colleagues that they are paying a set amount each month for their vehicle, don't worry about MoTs or servicing or repair bills etc for the two or three years of their deal then they just return the car to the dealer and start with a new deal all over again.
I have never had any experience of car buying this latter way - is this a good way to do it? With the cash I have available would I be better to buy a car outright and keep fingers crossed I don't run into huge repair bills and MoTs? Or should I use this money to pay the £125/£150/£175 a month depending on what brand new car I go for?
Any helpful advice will be most gratefully received - thanks in advance.

KTF

Do you want to own (purchase) a car or just rent (lease) it for a set period instead as that is the difference between the two methods you describe.

Scottish_Driver

I think that is partly what I can't get my head around - I am 42 and have always "owned" cars all my driving life, either through getting a loan from the bank in the past, or finance from garages or, as with my current vehicle, bought three-ish years ago, being able to pay around £4000 for it outright.
If I go with a lease or renting scheme, I have nothing to show for it after two or three years do I? I won't own a car - but is that important? Do I need to own a car nowadays if I can just keep returning it and moving onto a new car again?

forgotmyname

If your buying a vehicle thats going to lose £5000 - £6000 in value over 3 years then leasing maybe for you.

Problems arise when you have a 3 year lease and 3 months into it your circumstances change and you no longer require it.

Spend £5000 - £6000 on a car its your to do as you please. It will be a long time before its worthless.

More cost effective to buy?

Scottish_Driver

Thank you both for your responses - appreciate them.
There shouldn't be a problem with circumstances changing, secure job, income will remain the same and increase over next couple years too.
I think I have been stung into considering the leasing arrangement because I really have ended up spending a lot on repairs at MoT time on my current car over last three years (04 Mercedes A Class, not the best purchase with benefit of 20/20 hindsight).
Don't want to spend say £6500 on a 60ish plate, Fiesta for example, or something similar and have to fork out hundreds or even thousands again over next few years on repairs. :-/
It is so confusing making what is the best financial decision!

Hintza

Leasing a car is only cost effective on unpopular cars that the manufacturer can't shift or models that are about to be replaced or if the they have an overstock for some reason.

Leasing is an easy way to have new car and if it suits you knowing all you have to worry about is your monthly payment then it can take a lot of hassle out of the equation. (I have leased two a few years back and loved ease of it all).

The one thing you need to do is set up a spreadsheet and work out the costs of:-

Lease new
PCP new
Loan from Bank
Cash
Pre-Reg
2nd Hand

Obviously your heart will have a preference but at least you will know then which options are acceptable.

If you think leasing is right for you DO NOT choose the car but choose the deal (eg take a Jeep instead of BMW if the numbers say so, if you really want a BMW it will be cheaper by other means 9/10 times). Take your time if leasing, good deals take time to find 2-3 months.

There are many on here who think everyone who buys new is mad and purely from a monetary point of view they have a point but there are other factors to consider.

I for one have gone to the other end of the scale and now have salvage repaired thus giving me a 3 year old car for the price of an 8 year old car.

Horses for courses.

forgotmyname

But if you spend £6500 on a car it should be reliable for at least 3 years. If you sell it for scrap after 3 years tour going to be £100 better off than spending £6500 on a lease car that you just hand back.

Lease cars are not exempt from other costs also. Tyres, Brakes, Servicing are they included?
What is some causes a little scratch with a shopping trolley or car door?
if you dont get them repaired to a high standard then they will charge you extra also.

Hintza

What you seem to forget is some people want a new car, if nobody bought new you wouldn't be able to buy the cars that suit you. As I said money is not everything in the decision to buy a new car.

forgotmyname

But they are not sure if they want a new one. original post said should they get a 2nd hand one or lease one.

Not i want a brand new car should i buy or lease. They mentioned a used one.