Buy a "fancy" car or just lease it?

F1F93

DrEskimo wrote: »

Money for what though? If the OP is sensible, they will have cash reserves for emergencies and other savings. This should be money ear-marked specifically for buying a car. Interest from a savings account would be small, and the time frame too short for any reasonable investment without high risk of capital loses.



They don't though. The get a car with zero spec, as adding any options will result in a much higher cost. A sunroof alone is £995. This is why the used car is even better value, as a comparable lease would be even more expensive.

Remember we are talking a 2019 BMW with <5k. I would suggest you couldn't even tell it apart if the plate was covered and both the lease and the 'used' model were parked side by side..except that the used would have metallic paint and other options maybe!

So you are paying £2k extra to get the same car with less options and with more restrictive terms of use. If having money sitting in a bank is so important than just borrow it. You can do it for less than £2k with current APRs.

Not only is that a rather large assumption that the OP has plenty of other cash lying around for emergencies, but also I'm not quite sure what the point is - would you not like to have some more cash in your bank account?! Why does it need to be for something?!

Also regarding your next point, given that my numbers for the lease cost were coming from OP I have assumed that the spec of the car is what he wants. I would hope that this therefore is comparable, as if not then OP will never get an accurate answer to his question. So it wont be £2k for the same car with less options - it will be £2k for a car that is identical but brand new, and potentially with options that the OP prefers. Plus having the cash in the bank. Plus no hassle of having to sell a car at the end of the term if you wish to change.

Besides, I'm not saying that the OP must go out and get the lease. My original point was arguing against the "you have nothing at the end of a lease" argument which is quite frankly false. They are not for everyone, and they are far from perfect. But to say that noone should ever get a lease is simply false as they do offer plenty of advantages over buying a used car outright.

Mr.Generous

Whats the road tax situation for a car at years 1-5 if its list price was £40k? I thought it was something to be avoided - £460 a year I think.

DrEskimo

F1F93 wrote: »

...but also I'm not quite sure what the point is - would you not like to have some more cash in your bank account?! Why does it need to be for something?!

Would you go to the bank tomorrow and get a personal loan for £20k that cost £2k in interest, just to have £20k in your account?

If the answer is no, then hopefully you can see the point I was probably labouring to make...!

F1F93 wrote: »

But to say that noone should ever get a lease is simply false

I don't believe I did...?

Scrapit

Mr.Generous wrote: »

Whats the road tax situation for a car at years 1-5 if its list price was £40k? I thought it was something to be avoided - £460 a year I think.

38 quid a month? Hardly a big cost.

F1F93

DrEskimo wrote: »

Would you go to the bank tomorrow and get a personal loan for £20k that cost £2k in interest, just to have £20k in your account?

If the answer is no, then hopefully you can see the point I was probably labouring to make...!



I don't believe I did...?

Of course not. But if I only had 20k in the bank and had a 20k purchase to make, completely wiping out my savings and the monthly payments were affordable, suddenly it becomes a lot more attractive. It's all about the rest of the situation.

Let's put it this way. If you had two options to buy a car, both otherwise identical, but option B let's you keep 20k in cash in your bank upfront, can you not see why that might be beneficial...?

Now, yes, I appreciate that the two options are not exactly identical. But it doesnt take a huge leap of faith to think that all of the other advantages of the lease (which I note you yet again seemed to ignore) might be worth the 2k.

motorguy

Mr.Generous wrote: »

Whats the road tax situation for a car at years 1-5 if its list price was £40k? I thought it was something to be avoided - £460 a year I think.

Interesting point, and yes it would apply to both the 520i M Sport and 520d M Sport.

Worth noting and a bit of a pain but unavoidable if the O/P wants one of these new or a year old

AdrianC

Scrapit wrote: »

38 quid a month? Hardly a big cost.

Certainly not compared to the depreciation...

First taxing - variable (£0-£2,135), CO2 dependent.
After that, £145/yr for VED for almost every car.
+£320/yr for +£40k list price cars for the first 5 years from registration date.

DrEskimo

F1F93 wrote: »

Of course not. But if I only had 20k in the bank and had a 20k purchase to make, completely wiping out my savings and the monthly payments were affordable, suddenly it becomes a lot more attractive. It's all about the rest of the situation.

In which case I wouldn't be looking to buy a £20k car.

F1F93 wrote: »

Let's put it this way. If you had two options to buy a car, both otherwise identical, but option B let's you keep 20k in cash in your bank upfront, can you not see why that might be beneficial...?

Not really. It's the same reason I buy my insurance annually and not monthly. It's the reason I save up money. To buy things without borrowing and reduce costs.

F1F93 wrote: »

Now, yes, I appreciate that the two options are not exactly identical. But it doesnt take a huge leap of faith to think that all of the other advantages of the lease (which I note you yet again seemed to ignore) might be worth the 2k.

I'm not ignoring them, I just don't agree that they are advantages or worth extra. I don't see why being brand new adds value if the cars are otherwise identical (other than the extra year warranty of course), handing back a lease can be more hassle (see threads on here) than selling (dealer bought my last car and picked it up from my house) and you can buy the car and have money in the bank too. Just get a loan after buying the car. It'll be cheaper too.

I see the advantages of cheaper overall cost and complete freedom to drive the car as long as I want and as much as I want far greater, but I guess that's where we differ.

:beer:

AdrianC

DrEskimo wrote: »

It's the same reason I buy my insurance annually and not monthly.

EVERYBODY buys their car insurance annually.

Some people merely repay the finance on it monthly, and kid themselves they're buying it monthly so as not to scare themselves with the true cost of it.

F1F93

I'm not sure if you're genuinely cant see my point or are just arguing for the sake of it, but okay, I'll bite.

DrEskimo wrote: »

In which case I wouldn't be looking to buy a £20k car.

But you're not, are you? OP is. And, funnily enough, his circumstances may be slightly different to yours.

DrEskimo wrote: »

I'm not ignoring them, I just don't agree that they are advantages or worth extra. I don't see why being brand new adds value if the cars are otherwise identical (other than the extra year warranty of course), handing back a lease can be more hassle (see threads on here) than selling (dealer bought my last car and picked it up from my house) and you can buy the car and have money in the bank too. Just get a loan after buying the car. It'll be cheaper too.

I see the advantages of cheaper overall cost and complete freedom to drive the car as long as I want and as much as I want far greater, but I guess that's where we differ.

:beer:

You are ignoring them. Just because you wouldnt pay extra for them doesnt mean they are worthless. Different things matter to different people. Me, for example? I dont care about having leather seats. So can I say that they dont add value or aren't an advantage? Of course not. All other things being identical, the car with leather seats will be more valuable. Then it's up to me to see if I want to pay the extra. Not your choice, not some random person on the internet's, mine. See how this works now?

If OP was therefore looking at two otherwise identical cars, one with leather seats and one without, it would be downright disrespectful of me to say not to get the leather seats because of my preferences. The correct thing to do would be to offer the OP all of the evidence and let them decide rather than allowing personal bias to get in the way.

Indeed, I dont actually have any cars that are leased, having bought them outright myself. But I can appreciate the advantages and disadvantages of both and can see how leases might be beneficial in some scenarios.