Leasing v buying?

FreddieFrugal

Why would you "save up" for a 3 year old car, like thats some sort of aspiration for people?

Newer car doesn't = better car. People often choose older models because they don't like changes made in the latest version, like a sudden change in boot size

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.

Paying interest is better than paying for the actual thing you're buying?

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.

How can having SOME money (from selling old car) be comparable or less than having NO money (from end of lease deal - no car to sell)
Sorry but that's actually a really stupid thing to argue.

no hassle brand new car.

Don't have to spend long looking on this forum to realise that the above description is debatable.


Can't find it now but suggesting that a newer car is more efficient is also not necessarily true. There's a limit to how efficient they can make a combustion engine and as you know official figures are over exaggerated, and besides people often report lower MPG until the car is properly broken in. So in many cases a three year old car may be running better than a brand new car.

FreddieFrugal

Pointless argument, you've labelled me as someone anti finance and new cars, which yo be fair I've helped you back up by trying it argue my point too far so it's ended up sounding extreme, which wasn't my original intention.

Leasing is fine, it has it's uses, it's best for some situations

My original statement, which I still stand by is this:

Buying used, selling on, buying used - so long as you do your homework, get a good one and look after them will be CHEAPER long term than leasing.

NOT necessarily BETTER or most SUITABLE or DESIRABLE or ASPIRATIONAL for every person in every situation. But without a shadow of a doubt CHEAPER LONG TERM.

and nothing you've said suggests that is wrong...so frankly I'm not sure how the discussion has gone on so long.

If it's been through my poor communication, then I apologise

motorguy

IanRi wrote: »

Newer car doesn't = better car. People often choose older models because they don't like changes made in the latest version, like a sudden change in boot size

I dont agree. I'd say if you handed 1,000 people a 3 year old car for free OR the same age of car but the newer variant for free, 95% will take the newer variant.

IanRi wrote: »

How can having SOME money (from selling old car) be comparable or less than having NO money (from end of lease deal - no car to sell)
Sorry but that's actually a really stupid thing to argue.

OK. So, i lease a car at £1,200 down and £200 a month for three years, you buy the equivalent with cash at £20,000.

After three years i return my car to the lease company and you sell yours for £10,000.

You've got £10,000 in your pocket, so according to you, you've got the better deal, however who spent less money?

Whos really stupid for not getting that?

IanRi wrote: »

Don't have to spend long looking on this forum to realise that the above description is debatable.

Relative to the millions of new cars sold?

And how many more issues are there when someone has bought a used car and theres a major hidden problem but the seller doesnt want to know?

IanRi wrote: »

Can't find it now but suggesting that a newer car is more efficient is also not necessarily true. There's a limit to how efficient they can make a combustion engine and as you know official figures are over exaggerated, and besides people often report lower MPG until the car is properly broken in. So in many cases a three year old car may be running better than a brand new car.

But you're talking about running the car to seven years old and it could have been a three year old design when you bought it, so you're running ten year old technology? By that stage a leaser will be on their third car, invariable much more economical.

I'm running a 10 year old X Type 2.2D as a second car and getting a heady 37MPG. My BIL has a new XF 2.2D and is getting 52mpg on average.

WellKnownSid

Hintza wrote: »

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.

Spot on.

It conveniently hides the 50% discount being offered by the manufacturer on new cars, and ironically means that IanRi is guaranteed a brilliant selection of one-owner 1-3 year old cars at low-low prices. Around half of all cars 'sold' in the UK are leased.

Yes, you go looking for the deal rather than looking for a particular car. Keep an eye on the many "contract hire and leasing" type websites for a couple of weeks and you'll soon spot the bargains - they won't all be cheap. End of the month and end of the year usually yields some cracking deals.

I happen to like smaller hatchbacks with bigger diesel engines - good to drive - excellent mpg - and the bread and butter for leasing companies.

I also run other cars which I own. It means I can choose low-mileage older cars - very cheap to buy, and very cheap to keep on the road because I'm doing 5,000 miles a year in them - not 20,000 - so the lease car is taking the mileage burden.

motorguy

IanRi wrote: »

Pointless argument, you've labelled me as someone anti finance and new cars, which yo be fair I've helped you back up by trying it argue my point too far so it's ended up sounding extreme, which wasn't my original intention.

Leasing is fine, it has it's uses, it's best for some situations

My original statement, which I still stand by is this:

Buying used, selling on, buying used - so long as you do your homework, get a good one and look after them will be CHEAPER long term than leasing.

NOT necessarily BETTER or most SUITABLE or DESIRABLE or ASPIRATIONAL for every person in every situation. But without a shadow of a doubt CHEAPER LONG TERM.

and nothing you've said suggests that is wrong...so frankly I'm not sure how the discussion has gone on so long.

If it's been through my poor communication, then I apologise

Oh aye. I agree fully.

My only debating point has been the comparison between leasing new but buying used.

As i've said, for the record, i dont lease and never have. Might at some point though.

The real issue, subjectively for me with leasing is the lack of flexibility if your circumstances change - you could end up paying all of the remaining payments as a penalty if you hand the car back. :eek:

My financial circumstances, nor my requirements of a car are set in stone for long enough for leasing to be a risk free option. I'm an IT contractor so my next contract might mean a 200 mile daily commute, or it may mean a car needs to lie at an airport all week or it might mean working from home, likewise i could get another contract for the day after i finish this one or it might be a month or more

motorguy

WellKnownSid wrote: »

Spot on.

It conveniently hides the 50% discount being offered by the manufacturer on new cars, and ironically means that IanRi is guaranteed a brilliant selection of one-owner 1-3 year old cars at low-low prices. Around half of all cars 'sold' in the UK are leased.

Yes, you go looking for the deal rather than looking for a particular car. Keep an eye on the many "contract hire and leasing" type websites for a couple of weeks and you'll soon spot the bargains - they won't all be cheap. End of the month and end of the year usually yields some cracking deals.

I happen to like smaller hatchbacks with bigger diesel engines - good to drive - excellent mpg - and the bread and butter for leasing companies.

I also run other cars which I own. It means I can choose low-mileage older cars - very cheap to buy, and very cheap to keep on the road because I'm doing 5,000 miles a year in them - not 20,000 - so the lease car is taking the mileage burden.

+1

Its a huge big production line of cars to suit peoples needs.

Theres leasing and PCP deals that are now prevalent on new cars, so it encourages those who want a new car back in every two or three years. Enough cars are also preregistered so that people who want straight finance can afford them.

Lets be honest, who buys a new car for cash?

Then the cars come back in, and become used car stock for the dealer, so he gets a second bite of the cherry, and used buyers get a relative bargain.

They trade in older stuff, which gets sold on to smaller indie dealers who satisfy the need of those with £5K or so to spend.

motorguy

IanRi wrote: »

Pointless argument, you've labelled me as someone anti finance and new cars, which yo be fair I've helped you back up by trying it argue my point too far so it's ended up sounding extreme, which wasn't my original intention.

Leasing is fine, it has it's uses, it's best for some situations

My original statement, which I still stand by is this:

Buying used, selling on, buying used - so long as you do your homework, get a good one and look after them will be CHEAPER long term than leasing.

NOT necessarily BETTER or most SUITABLE or DESIRABLE or ASPIRATIONAL for every person in every situation. But without a shadow of a doubt CHEAPER LONG TERM.

and nothing you've said suggests that is wrong...so frankly I'm not sure how the discussion has gone on so long.

If it's been through my poor communication, then I apologise

By the way, theres no need to apologise. Its just a bit of a debate on the internet to pass the time, and you raised a load of interesting and valid points so fair play.

:beer:

thescouselander

Buying car with cash actually costs too. If you have a lump sum tied up in your car then the cost of that capital needs to be accounted for. For example, the £10k mentioned earlier will be worth less in real terms after 3 years and the opportunity to make a return on that cash (of at least preserve it's real value) by investing or saving it will be lost.

So if you can get credit at similar rates to what you might make in interest on saved/invested capital it balances out.

motorguy

thescouselander wrote: »

Buying car with cash actually costs too. If you have a lump sum tied up in your car then the cost of that capital needs to be accounted for. For example, the £10k mentioned earlier will be worth less in real terms after 3 years and the opportunity to make a return on that cash (of at least preserve it's real value) by investing or saving it will be lost.

So if you can get credit at similar rates to what you might make in interest on saved/invested capital it balances out.

And you've to tie up that capital for that time, then get half of it back if you're lucky come resale time in three years time :eek:

BJV

100% lease can better much better for some people.


It will depend what you are using your vehicle for, mileage and what type of car.


It will also depend what type of lease. Lease is a very broad term and can be used to describe lots of different finance packages. The most common offered to private customers is a form of personal contract purchase.


You put a deposit down, make monthly payments then at the end decide if you want to part exchange it, hand it back or pay the finial optional payment.


The manufacture loves it as they sell more cars = more market share. So to tempt you they normally put fab low rate finance, sometimes servicing packages even deposit contributions. You are also statistically more likely to buy another or at least visit the showroom when it is time to change. Don't forget they know to the day exactly when you have to do something.


The dealership loves it, they sell more cars and normally get the servicing in between as well as a good change of getting prime used stock back.


Advantages for you, little or no repair bills, the reliability and lets face it kudos of owning, driving a new car.


Pitfalls, unless you regularly change your car then a low rate hire purchase may be more cost efficient.


Only you will know which is best but why not work out the price differential. After all I am not a snob but would I rather drive a brand new car or a 4 year old one? If the cost if the same and in some cases it can be I would prefer the new one please.