Leasing v buying?

FreddieFrugal

WellKnownSid wrote: »

If you look after your car no penalty. Normal wear / tear / dings commensurate with mileage is accepted. No different to regular car hire.

I've just handed back a car would have been £17.5k at the showroom new, now has 31,000 miles on it after two years and is worth about £6k on we buy any car. Total lease cost for me was £4,100 plus two services. Didn't even replace the front tyres.

What car was it out of interest? Fiesta size?

Right say you have similar deals for the next 10 years £20,500

Say I trade in at 6, buy another three year old car, trade at 6 etc. for same time scale. £12,100

What if I keep car for an extra year, so sell at 7, buy at 3, sell at 7
Again over 10 years that's less at 11,250

I didn't include servicing as you didn't quote a price, was servicing included in your deal? If so add another £2000 - £4000 on to mine, still less than £20,500
If not and you paid for it then less difference to make up through that.

Fair enough if you just like changing vehicles often but it's not something to champion as a a good value deal to someone who's looking to save money.

I'd always rather pay my money, and know that the car was now mine, no matter what happened in the future, my option what to do, run it for years, trade in sooner. As many miles as I choose to do in it!

macman

Is this for business use? If so, you can only reclaim the VAT if you yourself are VAT registered.
Monthly leasing rates are invariably quoted ex-VAT.
For most people, a PCP will be the better option if you want a new car.

Minrich

WellKnownSid wrote: »

If you look after your car no penalty. Normal wear / tear / dings commensurate with mileage is accepted. No different to regular car hire.

I've just handed back a car would have been £17.5k at the showroom new, now has 31,000 miles on it after two years and is worth about £6k on we buy any car. Total lease cost for me was £4,100 plus two services. Didn't even replace the front tyres.

What car was that ? The figures seems fantastic .

gzoom

Leasing is cheap way to run a BRAND NEW car every 2 - 3 years. I current have a Nissan Leaf on PCP, its costing me £200/month in finance costs, £0 deposit, so over 24 months will cost me £4800.

This is cheap for BRAND NEW car, because your almost certainly loss alot more than £4800 in deprecation on a £20K over 2 years. The difference been with a lease/PCP I don't have to put in a large up front payment.

BUT we also recently sold our old Honda Civic for £4800. It had done 90K, but I reckon was good for another 50-60K with no issues, and would still be worth £2Kish at that point. So keeping our old car would have worked out cheaper, purely based on deprecation costs.

I should add we bought the Civic as a ex-demo so it was pretty much new, and paid £13.5K, so over 8 years of use and 90K it only depreciated by £1K/year or under £100/month. We didn't have to replace a single item on the Civic, only additional costs were consumables such as servicing (£200/year), tyres, MOT (never even had a single advisory), and fuel.

Biggest cost of new car ownership is depreciation, if you keep the car for a long time that helps to reduce the impact of depreciation. Leasing/PCP is simply another way to pay for the depreciation without having to stump up a large initial payment, but the downside is your more likely to end up with another new car in 2-3 years, and be exposed to the on going depreciation costs of new car versus the lower deprecation costs on a 3-4 year old.

So in the short-term (2-3 years) leasing/PCP is cheaper, but longer term its more expensive - assuming you wouldn't normally buy a brand new car every 2-3 years.

WellKnownSid

Minrich wrote: »

What car was that ? The figures seems fantastic .

High spec 208 diesel. Typical bread and butter car for leasing, do loads of miles in at 70mpg, hand it back before you need tyres, brakes, MoT, etc - the point is you'd be daft to buy one new!

One more negative about leasing - when the time comes to change you can't usually schedule collection of the old car / delivery of the new the same day. Fine if you have access to another car for a couple of weeks if your new car is delayed. (Which also why you should lease from stock - most likely cheaper as the manufacturer wants shot of them and firm delivery dates.)

motorguy

IanRi wrote: »

Surely that certainty that you're paying more than you should be for a car you don't own is a negative not a positive.

How are you paying more?

As has been said, look for the offers on leasing and you WILL run a brand new car for LESS than buying a new car and selling it after the same term.

motorguy

IanRi wrote: »

Right say you have similar deals for the next 10 years £20,500

Say I trade in at 6, buy another three year old car, trade at 6 etc. for same time scale. £12,100

What if I keep car for an extra year, so sell at 7, buy at 3, sell at 7
Again over 10 years that's less at 11,250

I didn't include servicing as you didn't quote a price, was servicing included in your deal? If so add another £2000 - £4000 on to mine, still less than £20,500

You're not comparing like with like though.

Try the same figures only with new cars.

As has been said, leasing can be cheaper to run a NEW car over a set timeframe.

andrewf75

As I see it leasing can be broadly comparable when compared to buying a new car and buying another new car every few years.

Personally I would never lease because I would never buy a brand new car and would never change it every few years because you pay a lot in depreciation that way. But if you buy cars that way anyway, leasing won't be any more costly.

motorguy

andrewf75 wrote: »

As I see it leasing can be broadly comparable when compared to buying a new car and buying another new car every few years.

Personally I would never lease because I would never buy a brand new car and would never change it every few years because you pay a lot in depreciation that way. But if you buy cars that way anyway, leasing won't be any more costly.

Yup, thats it in a nutshell really.

Doesnt suit everyone and its not the best option for everyone.

FreddieFrugal

motorguy wrote: »

You're not comparing like with like though.

Try the same figures only with new cars.

As has been said, leasing can be cheaper to run a NEW car over a set timeframe.

That's because my advice to the OP was not to buy a NEW car. I'm arguing it's far better financially speaking to go used, rather than fork out on leasing or buying a new car.

OP said he wants new because of the high cost he's paid on repairing his old car. He hasn't specified how much that was, or what car it was. They are likely to be better off choosing a good condition used car.

From the OP, it was suggested that the decision is based on EXPENSE concerns, not on desire to own a brand new car.

If expense is concern get a decent three year old used car and that's going to work out far cheaper long term.