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Leasing v buying?
Comments
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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.
No it wasnt. Not at any point did you advise the O/P not to buy a new car. You just went in to the usual monologue from people who dont "get" leasing as to how its more expensive than buying a 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.
Your statement was a general rant against leasing, it wasnt specific to the O/P
However if you want to make it specific, the O/P has had considerable expense when previously buying used, therefore wants to look at leasing. Also, it did sound to me like the O/P had an issue with UNPLANNED expenses, as opposed to necessarily a restricted budget.
There are many merits to leasing that may well suits the O/P - specifically, controlled monthly motoring costs. As opposed to buying a used car and having unplanned big bills.
If expense is concern get a decent three year old used car and that's going to work out far cheaper long term.
It may well do, however if its "unplanned" large expenses that are a concern then leasing can make a lot of sense.
Also, IF as you are suggesting, the O/P is on a tight budget, where are they going to get the money to buy a three year old car? Finance it? Oh, then you're into a monthly payment and probably changing when its paid off anyway, only you've the big bill risk again by running a car from 3 -> 6 years old.
You can lease a brand new car these days from around £100. There is a lot of merit in that and there is a lot of appeal to people, particularly once you tot up depreciation, MOT costs, wear and tear and inconvenience.0 -
Sounds like a terrible deal to me.
0% Finance or payment in full and never on a brand new car, 1-3 year old massive saving, still good life in it, so long as you research before hand, check condition and look after it.Not at any point did you advise the O/P not to buy a new car.
Think I did actually
I agree with you however, motorguy, that leasing could well be a good option, short term, for someone. Just not as a long term option as over a number of years it's poor value.
If you wanted/needed your own car, but no cash, then pcp/car loan could be a good option. But still surely better to go even just 1 year old to make a significant saving?Mortgage remaining: £42,260 of £77,000 (2.59% til 03/18 - 2.09% til 03/23)
Savings target June 18 - £22,281.99 / £25,0000 -
Think I did actually
You responded to Scouselander not the O/P and wrote off his suggestion of the advantages of leasing, based on your subjective views on the subject.
I agree with you however, motorguy, that leasing could well be a good option, short term, for someone. Just not as a long term option as over a number of years it's poor value.
I dont agree with that. If someone wants a new car why put your own hard earned cash into it? £200 a month gets you in to most stuff people want, £100 a month will get you a budget car.
There is a lot of merit in rolling up your depreciation, warranty, (moreoften) servicing and tax into one controlled monthly payment, instead of the rollercoaster instead of huge outlay, save, save, save, huge outlay again.
If you wanted/needed your own car, but no cash, then pcp/car loan could be a good option. But still surely better to go even just 1 year old to make a significant saving?
Probably, possibly, maybe. Who knows. Its up to the individual to look at whats best for them and compare the real costs, rather than just writing off a particular was of driving a car.0 -
wrote off his suggestion of the advantages of leasing, based on your subjective views on the subject.
And an objective comparison of his and my figures.I dont agree with that. If someone wants a new car why put your own hard earned cash into it? £200 a month gets you in to most stuff people want, £100 a month will get you a budget car.
You're putting your hard earned cash into it whatever you do. You're either putting it into your own car that you then have available to sell on as and when needed, or you're putting it into another guys pocket with nothing to show for it, just someone else's car that is never yours and you have no flexibility over what to do with it once your agreement runs out.
The monthly cost of my car based on the figures I gave is about £90, but that's a mid spec family size car, not a budget car. And I have no limitations on it, it's mine.There is a lot of merit in rolling up your depreciation, warranty, (moreoften) servicing and tax into one controlled monthly payment, instead of the rollercoaster instead of huge outlay, save, save, save, huge outlay again.
You sound like one of those awful adverts for debt consolidation loan companies.
'Huge outlay' - depends on what you're buying doesn't it. In the example I used its £3200 every 3 to 4 years. That's less than £200 a month for 3 to 4 years.Probably, possibly, maybe. Who knows. Its up to the individual to look at whats best for them and compare the real costs, rather than just writing off a particular was of driving a car.
If you compare a like for like car, same make, model, engine type and spec, as in not a leased Ford Ka and I used Aston Martin V12 Vantage, then used will be cheaper long term.
So long as you don't buy a rust bucket and then continue to plough money into repairs when you should just replace it.
If you buy three year old car, trade in at 6 or 7 say, then repeat, checking you get cars in good condition and then you look after them properly, then your cash will go much further than leasing and as I've said, should you decide to stop driving, you can sell your last car to recoup a bit of it. You can't do that if you're leasing.
If I couldn't afford to cash buy a three year old car but needed a car desperately, then I would buy an older car and save up til I could. I wouldn't throw money away leasing.
If you're rich enough to not need those savings, great, buy whatever you want, however you want.
But if you're not and the only way you can afford to drive a brand new car is to lease....then you shouldn't be driving a brand new car!Mortgage remaining: £42,260 of £77,000 (2.59% til 03/18 - 2.09% til 03/23)
Savings target June 18 - £22,281.99 / £25,0000 -
If you're rich enough to not need those savings, great, buy whatever you want, however you want.
But if you're not and the only way you can afford to drive a brand new car is to lease....then you shouldn't be driving a brand new car!
Nonsense - if you can afford the payments and you're comfortable parting with the cash then why not have a new car? Using finance is no big deal and the costs of this are minimal compared to that of depreciation - that's why most new cars are bought on credit.
New cars are undoubtedly expensive but it suits some people. And if nobody bought/leased/whatever new cars you wouldn't be able to buy your second hand car.0 -
thescouselander wrote: »Nonsense
Yes obviously people need to buy cars and many people are in a financial position to do so.
Leasing may be better than pcp in some circumstances.
For instance - You NEED a car but don't have enough money to buy a three year old used in cash, in fact your cash would only stretch to a few hundred pounds which means you're very limited in 'good condition' car choice.
If it's therefore a toss up between getting a cheap banger that could cost the earth to keep running, or spending £100 a month on a budget lease car, while you saved up, then it could well be that leasing is the better option. So long as the mileage limit suits the amount of driving you'd need to do.
It's all well and good championing finance deals and monthly payments, but look at the number of people in debt because they only ever look at headline numbers rather than considering the full cost of the things they buy.
You would need to seriously consider whether you can afford the payments long term even if you had a change in circumstances. Reminds me if the program on a couple years ago about a car dealership. There was one chap who said he 'loved' top of the range cars, felt it was a lifestyle thing. He wanted to buy a few years old landrover. But there was obviously no way that he could afford to buy and run one on his salary. But through finance the monthly payments made it look like in theory he could. Despite being huge and for an incredibly long term. Luckily his friend suggested he also check insurance cost, which was a large enough number to dissuade him.
Point is I bet loads of people fall into the trap of getting something unaffordable because it looks affordable just looking at the individual payments, not considering the whole cost.
But again, yes, it's down to the indivual to check the best deals available at the time. Whether that's a low rate or '0%' pcp, or leasing or buying used.
But do what you can long term afford to do, not what you can just barely cover, is what I meant.Mortgage remaining: £42,260 of £77,000 (2.59% til 03/18 - 2.09% til 03/23)
Savings target June 18 - £22,281.99 / £25,0000 -
And an objective comparison of his and my figures.
based on a comparison skewed in favour of the point you wanted to make.
You're putting your hard earned cash into it whatever you do. You're either putting it into your own car that you then have available to sell on as and when needed, or you're putting it into another guys pocket with nothing to show for it, just someone else's car that is never yours and you have no flexibility over what to do with it once your agreement runs out.
You missed my point - buy a new car with cash, and you've to put a large lump sum in. Buy it with finance and you're paying interest on the loan.
Buy any car with cash and when you sell it you've nothing to show for it - other than less money than you started with, which very often is roughly equivalent to, or less than a comparable lease deal.
The monthly cost of my car based on the figures I gave is about £90, but that's a mid spec family size car, not a budget car. And I have no limitations on it, it's mine.
But you are running a car that is out of warranty, could hit a large unexpected bill, will need MOT'd, will need more maintenance, could well be less economical than the latest model, etc, etc. Then theres "disposing" of your own car, come time to change - running round dealers, or trying to sell privately but then it sells and you've no new car yet, etc, etc.
All that hassle can be taken away and rolled up into one controlled payment and a simple matter of picking the car up, driving it 3 years handing it back and getting the next deal.
You sound like one of those awful adverts for debt consolidation loan companies.
Because what they're saying uses the same principle - remove hassle, remove uncontrolled expenses and replace it with one simple payment.
'Huge outlay' - depends on what you're buying doesn't it. In the example I used its £3200 every 3 to 4 years. That's less than £200 a month for 3 to 4 years.
I thought you said £90 a month? Wheres the £200 a month from?
I would say to a lot of people £3200 is a huge outlay to find in one lump sum.
If you compare a like for like car, same make, model, engine
type and spec, as in not a leased Ford Ka and I used Aston Martin V12 Vantage, then used will be cheaper long term.
As i said - quite possibly, quite likely in fact, however that doesnt make it "best" for a significant amount of people. And likewise define "best"? Do we always have to go for the cheapest option which might cause hassle?
And lets not forget, for the bulk of the car driving masses - cars are hassle. They HATE dealing with car dealers, selling their car, worrying about sorting out MOT, being stiffed by a mechanic over repairs, unexpected bills, more depreciation than the expected, etc, etc.
So long as you don't buy a rust bucket and then continue to plough money into repairs when you should just replace it.
Agreed.
If you buy three year old car, trade in at 6 or 7 say, then repeat, checking you get cars in good condition and then you look after them properly, then your cash will go much further than leasing and as I've said, should you decide to stop driving, you can sell your last car to recoup a bit of it. You can't do that if you're leasing.
Conversely, i could argue that your cash will go much further with leasing as its getting you in to a no hassle brand new car.
If I couldn't afford to cash buy a three year old car but needed a car desperately, then I would buy an older car and save up til I could. I wouldn't throw money away leasing.
As is your perrogative, however thats a very subjective view.
If you're rich enough to not need those savings, great, buy whatever you want, however you want.
But if you're not and the only way you can afford to drive a brand new car is to lease....then you shouldn't be driving a brand new car!
Ah! The truth finally comes out! You're one of these people who thinks if you lease you cant really afford it
How dare people drive brand new cars!0 -
thescouselander wrote: »Nonsense - if you can afford the payments and you're comfortable parting with the cash then why not have a new car? Using finance is no big deal and the costs of this are minimal compared to that of depreciation - that's why most new cars are bought on credit.
New cars are undoubtedly expensive but it suits some people. And if nobody bought/leased/whatever new cars you wouldn't be able to buy your second hand car.
+1
We got our 370z for £20,000 @ 2 years old and 9,000 miles compared to a new price of around £33,000. Probably had been paid for with a PCP deal, or a lease initially. We couldnt have done that if there wasnt a percentage of people who financed / leased new cars.
So a win for the original buyer - probably bought on a subsidised PCP or cheap lease, and a win for us.
They're happy, we're happy.0 -
Yes obviously people need to buy cars and many people are in a financial position to do so.
Leasing may be better than pcp in some circumstances.
For instance - You NEED a car but don't have enough money to buy a three year old used in cash, in fact your cash would only stretch to a few hundred pounds which means you're very limited in 'good condition' car choice.
If it's therefore a toss up between getting a cheap banger that could cost the earth to keep running, or spending £100 a month on a budget lease car, while you saved up, then it could well be that leasing is the better option. So long as the mileage limit suits the amount of driving you'd need to do.
Why would you "save up" for a 3 year old car, like thats some sort of aspiration for people?
If someone is happy paying £100 a month, and probably getting a brand new city car to replace their 15 year old fiesta, then thats all they need.
It's all well and good championing finance deals and monthly payments, but look at the number of people in debt because they only ever look at headline numbers rather than considering the full cost of the things they buy.
Ah, the other great argument of the "if you cant afford to buy it with cash, you cant afford to drive it" brigade - people are really too stupid to be allowed finance, they'll only end up in debt.
An extremely small percentage have problems. And likewise you could argue that some cash buyers buy cars they cant afford to run, or their circumstances change and end up having to sell and lose a fortune.
And for the record, i'm not "championing" lease deals (i've never had one), i'm giving you objective reasoning to counter your extremely subjective views on the subject.
You would need to seriously consider whether you can afford the payments long term even if you had a change in circumstances. Reminds me if the program on a couple years ago about a car dealership. There was one chap who said he 'loved' top of the range cars, felt it was a lifestyle thing. He wanted to buy a few years old landrover. But there was obviously no way that he could afford to buy and run one on his salary. But through finance the monthly payments made it look like in theory he could. Despite being huge and for an incredibly long term. Luckily his friend suggested he also check insurance cost, which was a large enough number to dissuade him.
Ah, he was silly wasnt he? Trying to live outside his means like all these silly people with leases. :rolleyes:
Point is I bet loads of people fall into the trap of getting something unaffordable because it looks affordable just looking at the individual payments, not considering the whole cost.
Again, you've a subjective view that you are in some way canny for buying used cars with cash, however people who lease are just getting themselves trapped with something they cant really afford.0 -
Leasing can be a cracking deal on unpopular, difficult to shift cars. Where the manufacturer does not want to discount them too much up front and incur the wrath of the dealer network and customers who paid full price.
As with all deals you need to know what is a good deal and that comes from running the numbers (lease v pcp v hp etc). Once you have done that for a few weeks you will know a good deal when you see it.0
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