Lease a car vs buying a car?

dannyrst

andrewf75 wrote: »

Hardly surprising given the name of this website!

As I said before, there is nothing wrong with leasing in comparison to buying a brand new car. The issue is in the sense of financing a brand new car as opposed to a second hand one. Buying brand new cars is an expensive way of motoring. Fine if you can afford it, but there are plenty of people leasing cars who earn 25k a year and who complain about high rents meaning they can't buy a house!

That isn't the fault of PCP or lease though is it? That's the fault of the moronic youth of today.

andrewf75

dannyrst wrote: »

That isn't the fault of PCP or lease though is it? That's the fault of the moronic youth of today.

agree to a large extent, its a problem with society, although it is partly the fault of lease companies as some adverts deliberately target the young
I'm not seeking to blame anyone in particular though, just pointing out the problems.

Cornucopia

andrewf75 wrote: »

Hardly surprising given the name of this website!

That's the kind of thing I mean.

MSE isn't about living the cheapest, most austere life possible, it's about making good, rational financial decisions.

If someone is in the market for a new car or an expensive second-hand car then they should absolutely be considering all options.

mparter

JustAnotherSaver wrote: »

I guess leasing is the correct term. There's another term which i can't remember. Maybe you guys know. It's not hire car obviously but that's the only phrase in my head. lol.

Personal Contract Hire (PCH) is the term you're looking for.

Apodemus

I'm just a bit concerned that the shift to leasing as the main way of people buying new cars is allowing an increasing dissociation between new car purchase costs and affordability. A bit like the housing market, where increasing the mortgage-to-income multiple allows the natural brake on prices to be removed. Obviously, this is great for the car manufacturers but I am not convinced it is such good news for society.

Another hazard is the risk of manufacturers increasingly designing in three-year obsolescence - cars that are very cheap to run for the first three-years (while on lease) but difficult/expensive/impossible to keep on the road for the longer term. While cars no longer rust to bits as quickly as they used to, clutches and gearboxes now seem to fail much earlier.

My current car is 14 years old and only last year had its first replacement exhaust (at >190k miles). Clutch, gearbox and engine are still good at 210k miles but I know that something will give out sooner or later. It is difficult to see what in the current crop of new cars will still be running at similar mileages.

wymondham

keep in mind if you buy a new car you're losing about £100 a month just to depreciation in the first three years.... if you search carefully £100 a month can get you a tidy small lease car with no depreciation at all.... no brainer....

Cornucopia

Apodemus wrote: »

I'm just a bit concerned that the shift to leasing as the main way of people buying new cars is allowing an increasing dissociation between new car purchase costs and affordability. A bit like the housing market, where increasing the mortgage-to-income multiple allows the natural brake on prices to be removed. Obviously, this is great for the car manufacturers but I am not convinced it is such good news for society.

They are not similar things, though. Leasing is more akin to renting. (Renting in a fantasy housing market where it is cheaper to rent than to buy).

It may be that the car industry needs to do more to help customers understand what they are signing up for (based on the number of confused people we see here), but I am not convinced that Leases and PCPs are intrinsically bad, or intrinsically expensive.

Another hazard is the risk of manufacturers increasingly designing in three-year obsolescence - cars that are very cheap to run for the first three-years (while on lease) but difficult/expensive/impossible to keep on the road for the longer term. While cars no longer rust to bits as quickly as they used to, clutches and gearboxes now seem to fail much earlier.

My current car is 14 years old and only last year had its first replacement exhaust (at >190k miles). Clutch, gearbox and engine are still good at 210k miles but I know that something will give out sooner or later. It is difficult to see what in the current crop of new cars will still be running at similar mileages.

Unfortunately, all the parameters of car building are heading in that direction. Lower emissions equate to lower weight, and that means novel materials and less of them.

andrewf75

Cornucopia wrote: »

That's the kind of thing I mean.

MSE isn't about living the cheapest, most austere life possible, it's about making good, rational financial decisions.

If someone is in the market for a new car or an expensive second-hand car then they should absolutely be considering all options.

Well yes, but obviously on a site like this there will be a lot of people who think that buying or financing a brand new car and replacing it every few years is not a good, rational financial decision!
No-one is suggesting it shouldn't be considered.

Cornucopia

andrewf75 wrote: »

Well yes, but obviously on a site like this there will be a lot of people who think that buying or financing a brand new car and replacing it every few years is not a good, rational financial decision!

In a World where your cheap car lease may cost less than than your exorbitant public transport fares, all bets are off, I would say.

(Yes, I know there are other costs).

No-one is suggesting it shouldn't be considered.

I think some people are.

almillar

MSE isn't about living the cheapest, most austere life possible, it's about making good, rational financial decisions.

If someone is in the market for a new car or an expensive second-hand car then they should absolutely be considering all options.

Bingo. In the context of motoring, it's about getting a good deal on a Ferrari, and not paying full price for a Fiesta. It's NOT about everyone driving a banger.