New car lease or buy used?

flashg67

Most lease companies follow the BVRLA code of conduct, so it doesn't have to go back perfect - non members have to buy the guide but any lease company or broker should be able to find you one to read

w211

You may find this guide from Mercedes-Benz useful to what's acceptable damage when you return your car (obviously, this applies to their cars, if you're planning on getting a different brand, then it may be different, but I just found this to give you some idea - other manufacturers could be more lenient/stricter)

http://tools.mercedes-benz.co.uk/current/passenger-cars/pdfs/finance-insurance/vehicle-return-standards.pdf

IamNotAllowedToUseMyName

You don't have to buy new to have a lease or loan, so starting with a one year old, 10k miles car is giving you 30% less to finance, though comparisons aren't easy as the big finance companies are getting very large volume discounts. Most main dealers will have finance schemes. Remember though that however much it might seem so, lease schemes are not something for nothing. The main trick of them is that the finance guys access fleet discounts which the private buyer can't get near., but you need to remember that comparing a leased new car with a private purchase is going to look attractive as you are getting stung for depreciation and private buyer inflated new car prices.

When you get into financing a nearly new car, the playing field balances back to buying over loans as second hand the depreciation tends to have already been taken. Manufacturers may still have incentive schemes.

So when doing comparisons, if you can keep away from thinking a new car has significant real value over a slightly older one... it only takes 6 months for your shiney new 14 plate to turn into a grubby old previous plate... then in doing your sums you'll get a better sense of where the best value is.

ripplyuk

w211 wrote: »

You may find this guide from Mercedes-Benz useful to what's acceptable damage when you return your car (obviously, this applies to their cars, if you're planning on getting a different brand, then it may be different, but I just found this to give you some idea - other manufacturers could be more lenient/stricter)

http://tools.mercedes-benz.co.uk/current/passenger-cars/pdfs/finance-insurance/vehicle-return-standards.pdf

Thanks for the link. It seems Mercedes are quite reasonable! I might ask the dealer for a copy relating to the car I'd like to see how it compares.

ripplyuk

IanMSpencer wrote: »

So when doing comparisons, if you can keep away from thinking a new car has significant real value over a slightly older one... it only takes 6 months for your shiney new 14 plate to turn into a grubby old previous plate... then in doing your sums you'll get a better sense of where the best value is.

I'm not bothered about the car being brand new but it's more to do with the new or newish car needing less repairs. The lease would mean that I don't have to worry about it. With my savings I could only afford to buy a 4 year old car upfront and I'm guessing that'll be just the time they start needing work so I'll have spent loads upfront and still be paying for repairs.

IamNotAllowedToUseMyName

It you are worried about problem scenarios then consider that for £500 Mercedes sell a gap insurance to cover the following problem on a £20000 car for 3 years: say you are unlucky and have a total loss, in the first year your car loses say 30% of its value but your lease may have only paid off 15% of its value as the lease has a straight line of payments and also you are not aiming to pay for the whole value of the car but are relying on the predicted final value of the car at the end of lease. Your insurer pays you full market value for your car, but that will not pay off the lease - you have real potential for negative equity. So although you took the lease to protect you from risk, you could end up with a significant bill in an extreme scenario. £500 for say £3000 of gap is not good value insurance to sort out that rare occurrence.

RumRat

If you are only doing 4,000 miles a year then a lease or new car is a bit of overkill.
A used well serviced car will be better value. Or don't have one and polish up the bus pass.;)

w211

RumRat wrote: »

If you are only doing 4,000 miles a year then a lease or new car is a bit of overkill.

I was going to mention about 4,000 miles a year being low for a lease. Most leases are 10k/year (or intervals of 10k), and doing 4,000 miles a year in a lease which allow you to do 10k, you'll be wasting money, in my opinion.

However, Seat a doing a 5k/year lease on their Mii, for £69/month (no servicing though, I think), but they do require a large deposit.

Do you (OP) have any particular models in mind?

Ultrasonic

ripplyuk wrote: »

I don't need the car for work. I only drive about 4000 miles/year mainly for shopping and hospital appointments. I really like the thought of something hassle free and reliable...

Bear in mind that although new cars are usually OK they are not guaranteed to be hassle free, see e.g.:

https://forums.moneysavingexpert.com/discussion/4891077

The difference from buying used is that you don't end up footing the bill when things do go wrong.

As you do such a low annual mileage you will be paying a huge amount per mile if you buy a new car. In your position I would unquestionably be looking to buy a used car.

IamNotAllowedToUseMyName

Ultrasonic wrote: »

Bear in mind that although new cars are usually OK they are not guaranteed to be hassle free, see e.g.:

https://forums.moneysavingexpert.com/discussion/4891077

The difference from buying used is that you don't end up footing the bill when things do go wrong.

As you do such a low annual mileage you will be paying a huge amount per mile if you buy a new car. In your position I would unquestionably be looking to buy a used car.

Many new cars come with long warranties these days, I'm just about to pick up a second hand car with 9500 on the clock at something like 40% off list, 25% off best target price for a new car, 1 year old. It has 2 years warranty on it and I'm a low mileage user, 10,000 or less a year.

There are problem new cars too but 2 years of warranty should be enough to cover any surprises - avoid latest models, end of line builds are good value, loaded with goodies and tried and tested and keenly priced against competitors with newer releases.

Some brands also include the first x years' servicing or you can buy servicing contracts so leasing is not the only solution to anxiety free ownership.