Car lease coming to end - buy or hand back

lm1981

We have been paying £286 a month for last 4 years on a VW Tiguan.

the lease deal is coming to an end and we have option of paying 11k to buy it outright.

the car is in good condition and only done 20k miles. We are weighing up the options of either doing another lease who paying the 11k to buy outright. 

We have 11k saved up and I like the idea of not having a car lease - what would others do from a financial point of view. 

neilmcl

If it's a PCP then it's not a lease. Having said that, if you like the car and want to keep it then I don't see why you wouldn't pay the optional final payment and keep the car. The alternatives are to look for another used vehicle that may not be as good as the one you have or use the money saved for a deposit on another PCP. How much is the car worth?

macman

As above-what is the actual value of the car?
To avoid ambiguity, please confirm this is a lease and not a PCP?

lm1981

Sorry it’s PCP. We got the car as new and have had it 4 years.
if we were to buy same car elsewhere it would cost around 16k.

Petriix

No brainer then. Buy the car for £11k and then either keep it or sell it for an immediate profit. You could even use it as a deposit for a new car. MG are currently offering £4k off a new MG5 EV when you trade in any petrol or diesel car in addition to the trade in value so you would only have to find another £1-2k.

photome

lm1981 said:

Sorry it’s PCP. We got the car as new and have had it 4 years.
if we were to buy same car elsewhere it would cost around 16k.

there is your answer then

Flight3287462

Plus you have the added bonus of the car being the devil you know.

AdrianC

If you're only covering 5k/year, do you need a car that large and expensive in the first place?

Buy it for £11k, sell it for £16k, spend the £5k profit on buying something that'll do the job perfectly adequately. You have a car, you have your savings. Job jobbed.

You've spent £286 x 48 (and I'm assuming there's no up-front on that lease you've forgotten about?) for 20k miles = £13,728 = 68.6p/mile for the lease alone plus fuel, insurance, maintenance, all the other costs on top of the lease...

Ebe_Scrooge

I have to agree with the previous posters.  If the figures you've quoted are correct, then it sounds like you would end up with a decent car for less money than if you were to buy an equivalent elsewhere.  You'd have the advantage of no longer being tied to the terms of the finance (worried about having to rectify every little stone chip or whatever if you didn't want to), plus you know the history of the car from day 1.  You know it's been (hopefully!) well looked after, serviced/maintained regularly, driven sympathetically, etc etc.  If you like the car then it sounds like a sensible option - as long as £11K is the sort of money you'd be looking to spend on a car anyway.

missile

Buy the car, it is a no brainer

Herzlos

If the payment is less than the car is worth, then buying the car is the no brainer. From there it's up to you if you want to keep the car or sell it, but if you've had it since new and like it then keeping it seems like the best option as there's no hidden surprises.

Petriix said:

MG are currently offering £4k off a new MG5 EV when you trade in any petrol or diesel car in addition to the trade in value so you would only have to find another £1-2k.

Have you got a link? I don't see anything on their website.