Buy or lease?

stphnstevey

I have always previously bought new and kept latest for 8yrs

I am thinking now of buying something maybe 2yrs old with about 10k miles so to avoid the biggest depreciation

I was looking at around 15k to buy, maybe keep 6yrs, sell for something like 3k, so 12k total

Came across this lease and others like it
https://www.hotukdeals.com/deals/skoda-octavia-10-tsi-se-technology-24-month-2490-initial-69-pm-simpsons-skoda-3073843

If I can lease at around 4k every 2yrs, then over 6yrs it's the same 12k. But added benefit of car only ever being 2yrs old max, with likely upgraded technology and fuel efficiency

I do low mileage (3k) but use the car to travel to work locations across the country intermittently, so feel I need reliability. I am not too fussy on the car itself and with a lease it looks like I could try some cars out and change at end of lease if not like it

I have not leased before, does this sound feasible and is there anything to be wary of?

DrEskimo

What used car cost £15k and is only worth £3k in 6yrs with only 18k additional miles on it...? I would avoid that one!

My OH's car is a approved used Mini that she bought when it was 3yrs old/20k miles for £11k. It's a 60plate so will be 8yrs old this December and she would have had it for 5yrs and now has 45k miles on it. Private sale is worth £6k.

Never bought an extended warranty after the first 12months approved used one and it's had one repair for a thermostat in all these years at a cost of £300 from a main dealer.....

This is my biggest problem with posts comparing used with lease/PCP....the comparison with the used car is always so oddly high that it makes it look like leasing brand new cars are a no brainer...when you dig deep into the numbers you realise the numbers aren't quite right...

wgl2014

If you redo the sums with a 2yr old Octavia as per the link you are looking at spending £10k ish. That may make buying a bit more appealing.

Jonesya

I'm probably old fashioned but there's something wrong about large family cars with only 1 litre engines.

motorguy

Jonesya wrote: »

I'm probably old fashioned but there's something wrong about large family cars with only 1 litre engines.

No there isn't. It's about the bhp and torque. Modern technology means that can fit in a small package with better emissions

motorguy

stphnstevey wrote: »

I have always previously bought new and kept latest for 8yrs

I am thinking now of buying something maybe 2yrs old with about 10k miles so to avoid the biggest depreciation

I was looking at around 15k to buy, maybe keep 6yrs, sell for something like 3k, so 12k total

Came across this lease and others like it
https://www.hotukdeals.com/deals/skoda-octavia-10-tsi-se-technology-24-month-2490-initial-69-pm-simpsons-skoda-3073843

If I can lease at around 4k every 2yrs, then over 6yrs it's the same 12k. But added benefit of car only ever being 2yrs old max, with likely upgraded technology and fuel efficiency

I do low mileage (3k) but use the car to travel to work locations across the country intermittently, so feel I need reliability. I am not too fussy on the car itself and with a lease it looks like I could try some cars out and change at end of lease if not like it

I have not leased before, does this sound feasible and is there anything to be wary of?

For your typical average car you're maybe not far away there in terms of value - i tend to take it as a rule of thumb 50% drop every three years, so for a £15K car, thats £7,500 after 3 years, then £3,750 after 6 years ownership.

Factor in MOTs, ongoing maintenance, hassle factor, risk of big(ger) bills as it gets older, maybe the cost of any initial finance / loans to buy it in the first place (or opportunity costs if you buy with cash) and its not hard to see how taking a cheap lease deal every couple of years starts to stack up as viable.

The other option would be to find a car that doesnt depreciate at that rate and thus recover more come resale time.

If you're not terribly bothered about what you drive then for a two year old car i'd be looking at say a petrol Focus, Octavia or Astra which are good all rounders or for something with a longer warranty a Hyundai i30 (5 years) or a KIA C'eed (7 years).

I would have thought any of those could be bought for £10-12K at a year or two old and would recover £3K in 6 years time, thus beating your £12K costs by some margin.

If you do use a loan, then i think Vauxhall are doing 5 years interest free on a new Astra and can be got at a decent discount - use https://www.broadspeed.com or another broker site to find the best prices.

airandwater

From what I have seen leasing is rarely cheap enough to outweigh the benefit of PCP that gives you the option to buy, return or trade-in the car depending on depreciation.

Further more most leasing are for minimum 8-10k miles so you would be wasting money if you only do 3,000 miles.

Last year I bought a 2nd car, a Skoda Fabia 1.2TSI and managed to get a PCP deal for just 6k miles. I'm clocking 4K miles in it. Costs are not bad. £500 deposit, £162/month over 42 months. It can comfortably seat 4 adults, has AndroidAuto/CarPlay and can do 90% of everything my three times more expensive SUV can do.

Given that you do even less mileage than me I would recommend buying a 2 year old car from a main dealer. You can find a car in nearly new condition, get a year but in some cases a two year warranty.

wymondham

You don't do enough miles to get the benefit of leasing... basically the point of leasing is at the end of 3 or 4 years you have a well used car you need to get rid of and its handy for someone to come along and take it off your hands without having to try to sell it....

airandwater

wymondham wrote: »

You don't do enough miles to get the benefit of leasing... basically the point of leasing is at the end of 3 or 4 years you have a well used car you need to get rid of and its handy for someone to come along and take it off your hands without having to try to sell it....

That's not entirely true.

Lease and PCP payments are calculations based on forecasted mileage. If you are lease rate is based on 10k miles per year and you only do 3k then, at the end of the agreement you will hand a car back that's worth more than calculated because you did 30% of the predicted miles. Car goes back to the lease company and they sell it on for a handsome profit.

With PCP you can keep the car if it's worth more than the balloon payment which will be the case if you only do 30% of the mileage. Alternatively you can sell it a dealer and pocket the difference between the balloon payment and market value.

Remember that with PCP, just like leasing, you can still hand the car back at the end of the agreement.

The only major benefit of leasing over PCP is the option of choosing 12-24 months agreement which are ideal if think your life circumstances might change.

DrEskimo

Oh...and your £15k used budget is enough to be looking at 2/3yr old 2.0TFSI vRS DSG models with options....whereas the lease is 1.0TFSI SE manual poverty spec....

stphnstevey

Where is the best place to buy a used car now (say upto 3yrs old and upto 15k mileage)?
Autotrader seems to only be dealerships now, probably because it's so expensive for private sellers and there are some free alternatives?
Other sites like Gumtree and eBay seem more difficult to search with specifics such as distance, budget, make, model, mileage etc