Buy a "fancy" car or just lease it?

JackeeBoy

Hi all. This is a question I was curious about in general. Would be great to get your opinions on it in general as well as specifically to my situation below. This month I will be buying another vehicle and have decided to go for a used BMW 5 series. This will be the first car I've purchased after my Fiesta. Starting listed price is over £40k for a M Sport edition but I can get one for around £25k for a used car that is a year and less than 10,000 miles.

Out of curiosity I looked at the cost of leasing a car. Over 4 years I can lease the car for £17,000 (including deposit) and was thinking whether this was the more sensible option for getting a car that doesn't have the best reputation reliability wise or the cost of repairs.

DUTR

I saw the title but didn't see a fancy car mentioned .

DrEskimo

Is the lease comparable to the used car you are looking at in terms of trim and options? What is the mileage on the lease?

Comparing costs is pretty easy. Looking on AT, I think you could get the 5 series closer to £23k. There were a few dealers offering £1,500 deposit contributions if you use their finance. You can settle the next day and still keep these offers. These also typically include options like sunroof, which would add another £1,000 to the lease.

2015 models seem to go for around £10k, but would obviously depend on mileage. That would give you a depreciation of £13k. Add on any finance costs if you need it, and there is your comparison. You will have the warranty for around 2yrs I suspect, so add another £1,000 for extended warranty (if you want to) and the only other cost would be VED, so another ~£600 if you go for the 520i.

Does the lease include maintenance? If not, I would imagine the maintenance/servicing costs would be similar.

In all, I would suspect buying the used model would save you a good few grand. With no limits on how much you drive it, or how long you keep it.

Nobbie1967

The used car should still have the balance of the manufacturer's warranty on it and this can be extended for peace of mind. Given the high depreciation, buying a year old seems like the best option.

AdrianC

JackeeBoy wrote: »

but I can get one for around £25k for a used car that is a year and less than 10,000 miles.

Probably ex-rental at that age and mileage. Yes, even a 5-series.

Out of curiosity I looked at the cost of leasing a car. Over 4 years I can lease the car for £17,000 (including deposit) and was thinking whether this was the more sensible option for getting a car that doesn't have the best reputation reliability wise or the cost of repairs.

Buy the used one, and in 4yrs time, you have a £10k asset.
Rent the new one, and in 4yrs time, you have nothing bar a potential bill for the handback.

The numbers don't sound right, though. Remember, somebody's already burnt through £17k on the one that's now used - and it's got three more years of depreciation that'll need funding from borrowed money on the lease.

daveyjp

I thought the used price looked optimistic, but having looked on BMW website I am now wondering how much more they will depreciate.

Mid to high 40k cars when new now advertised at mid £20k after less than a year.

The 5 series is obviously a car not many buyers now want.

loskie

they will depreciate to zero in several years time they are not an asset but a consumable

Your lease costs looked high(you didn't mention mileage), big discounts are available on new BMWs

prowla

It might be worth comparing to the cost of a new one.

AdrianC

loskie wrote: »

they will depreciate to zero in several years time

Any car will depreciate to scrap value in, on average, 14 years from new.

Excluding outliers, the cheapest 2010 5-series on Autotrader are around £4.5k.
The absolute cheapest is £3k, with 180k miles.

Herzlos

Buy a used one and you get a lot more flexibility in terms of getting rid of it, keeping it longer, and less hassle about dings.

I'd only lease if it was something you can record as a business expense

JackeeBoy

Thanks all. I'm going to buy it cash, half what I have in the bank and the other half via a credit card. One question I do have is why the car depreciates so much? Assuming there are no mechanical major mechanical problems early on, I'm happy paying £25k for a car that can comfortably fit my family, looks good and drives even better. What I don't understand is why it depreciates so much after a year and who in their right mind will buy one new when a used one is so cheap! Relatively speaking of course