Buy or Lease

bigadaj

thescouselander wrote: »

That's not the reality of it in my experience. Usually there are good deals to be had on new cars that take the actual price paid down to near what a 1 year old model would cost. In fact I'd say buying a car that's a year old is the worst of all options because a new car could be had for the same money and you'd get an extra years warranty.

I think a lot of people make the mistake of thinking people pay list price for new cars when in fact it's quite normal to get 20% off the list price by the time various "contributions" are accounted for.

Depends on the numbers of course, 20% off list isn't special for many new cars and would be a shocking outcome for a one year old car. You want to be looking at 35-40% off list for a one year old car.

motorguy

thescouselander wrote: »

That's not the reality of it in my experience. Usually there are good deals to be had on new cars that take the actual price paid down to near what a 1 year old model would cost. In fact I'd say buying a car that's a year old is the worst of all options because a new car could be had for the same money and you'd get an extra years warranty.

I think a lot of people make the mistake of thinking people pay list price for new cars when in fact it's quite normal to get 20% off the list price by the time various "contributions" are accounted for.

Thats fair comment, particularly if you are planning on using dealer finance as there are usually manufacturer incentives on their finance schemes.

We've had this several times where a new car has worked out cheaper than a pre-reg / demo.

But likewise, its very worth checking the price of year old stuff.

I've just bought a year old Passat 1.6TDI SE Business with metallic paint. List price just over £25K, dealer discount price around £22K , broker price around £21K. I bought it from a main VW dealer fully serviced, mats, flaps, full tank of fuel and a years road tax for £15,250.

I also bought a 9 month old Golf back in 2013 for £12,250 from a main VW dealer when they were around £18K new after discount.

Of course, that works best on the common or garden cars where theres an abundance of ex demo / ex manufacturers / ex lease / ex rental stuff floating about.

motorguy

parking_question_chap wrote: »

Buy at a few years old, will save you a fortune over both of the above options.

Theres more to it than just "saving" money though. People buy new for various reasons.

If it were all about spending the least then we'd all be drivng 10+ year old Skoda diesels.

danm

Ebe_Scrooge wrote: »

Forgive me if I'm also missing something ... and I may well be !! But you're looking at the cost of 4 years' motoring, lease vs buy. The overall costs are broadly similar. In the "lease" scenario, you hand it back and have nothing to show for it. In the "buy" scenario you now own an asset worth £18.5k - which you can keep, or sell, or do whatever you want with ? If that's the case, it's a no-brainer in my book.

By the way, I'm not being arsey here.

This was my whole point... it seems like an easy decision

But then this made a lot of sense and I think it the way to look at it.

motorguy wrote: »

If you took the same £33K and paid the monthly lease payments from it at the end of the same timeframe you'd have £33K - £14,300 leasing costs = £18,700 in the bank.

Net, Net – seems little in it. – about choice and flexibility

almillar

Buying new vs buying 1 or 2 years old.
Yes, you can look at the big numbers, say £25,000 new, and £15,000 for 2 or 3 years old, but you'll not get finance as good on the second hand car as the new one. The interest rate from the dealer will be far lower on the new one (let's say 2% compared to 10%), and if you borrow from elsewhere you won't be able to PCP. So the cost of that car a few years old creeps up.
If you've got the money to buy outright in the first place, that's a different story, but you're very much in the minority, right or wrong.

motorguy

almillar wrote: »

Buying new vs buying 1 or 2 years old.
Yes, you can look at the big numbers, say £25,000 new, and £15,000 for 2 or 3 years old, but you'll not get finance as good on the second hand car as the new one. The interest rate from the dealer will be far lower on the new one (let's say 2% compared to 10%), and if you borrow from elsewhere you won't be able to PCP. So the cost of that car a few years old creeps up.
If you've got the money to buy outright in the first place, that's a different story, but you're very much in the minority, right or wrong.

We got a loan from the Halifax online at 2.7% APR so its worth checking around.

Lots of options out there without have to use (often expensive) dealer finance.

Also PCP deals on used cars can be VERY expensive in terms of interest charges - even though the monthly payments might be more palatable.

parking_question_chap

almillar wrote: »

The interest rate from the dealer will be far lower on the new one (let's say 2% compared to 10%)

Based on your imagination?

motorguy

parking_question_chap wrote: »

Based on your imagination?

Hes not far away with that actually - VW are doing a used car PCP offer which is at 10.9% APR. Their new car APR is as low as 4.6%

Skoda are doing 2.9% APR on a new Octavia an 0% APR on a Citigo but that jumps to 6.9% APR on a used car.

So the variance there across the VAG group is 0% - 2.9% to 10.9%

Mercdriver

And if you go to the used car supermarkets it's even worse - Motorpoint charge 12.9% typical.

andrewf75

The way I see it leasing is comparable value to buying a new car and keeping it for a few years. If that is the way you are then whether you buy outright or lease depends on whether you can or want to pay up front or monthly.

But the cheapest way of running a car is buying a few years old and keeping it longer term.