Better to Lease than Buy - Check my workings

billy2shots

@Nebulous2 @Grumpy_chap


Thanks both for breaking things down

It's not straight forward which is why I needed to seek other opinions.

Lease Vs buy (outright) is simple usually. 

It's complicated when there's a reasonable amount of upfront capital

And complicated further given the possibility that EV tech can move on quickly in 3 year destroying residuals. 

@ComicGeek PCP deals are truly awful for the model. A raft of car of the year awards globally and a shortage of units sees high demand leaving deals out of the equation. 

Grumpy_chap

billy2shots said:

It's not straight forward which is why I needed to seek other opinions.

Lease Vs buy (outright) is simple usually. 

It's complicated when there's a reasonable amount of upfront capital

Glad to have been of help, and hope you enjoy the car whichever way you choose to fund it.

Nebulous and I have come out with slightly different numbers which, in turn, vary marginally from yours, but no delta that makes the decision vastly different.  Part of that decision is your appetite to risk.

I am inherently anti-lease and anti-PCP, but there are cases where lease offers a good solution - this is certainly steering towards the lease option.  It is baulking to see a written down cost of over £20k in three years and 24k miles, that's over 85 pence per mile!(*)  The IONIQ 5 is a fantastic looking car, though.  Coincidentally, I saw a Kia EV6 on the road this morning, which I think is their equivalent model and couldn't help but think how it was so similar to the Jaguar i-Pace.

(*) Given, I suspect, you are going to go for a car at this kind of lease / capital cost, that pence per mile just to have the car might well be very similar irrespective of what car you opt for.

Do feedback when you have the car on which funding route you choose and how you like the car - good points and bad.

troffasky

Mystic Meg over here says, don't worry about the residuals collapsing due to new technology in 3y. The supply crunch will have ripple effects for years to come and batteries in particular will be scarcer than many would want them to be, so I think prices are going to be firm [for EVs at least, smokies will be a different matter] for a good few years yet.

Anyway, I am missing something here...how can it be cheaper to lease than buy? The leasing company has to buy the car too, so where is their profit coming from?

Grumpy_chap

troffasky said:

Anyway, I am missing something here...how can it be cheaper to lease than buy? The leasing company has to buy the car too, so where is their profit coming from?

It is possible that the lease company get the future residual value calculation incorrect.

More likely, big lease company has a multi-year framework deal with Hyundai to provide cars at "list less a massive discount" and the terms of that arrangement did not exclude a model that was not even launched when the arrangement began.  So, the model has just been launched, consumer discounts are not yet available, the lease company can still capitalise on the "list less massive discount" agreement and offer the cars favourably.

There were a couple of threads recently about SKODA lease deals - so cheap you could almost order one even if you did not want a car.   

Nebulous2

troffasky said:

Anyway, I am missing something here...how can it be cheaper to lease than buy? The leasing company has to buy the car too, so where is their profit coming from?

That's something I don't understand either. There were Leafs available about 6 weeks ago and then after the fuel supply issues they completely disappeared. I went to a dealer, had a test drive and was told that I'd have to wait until March / April for a factory order. Another dealer told me there wasn't a single car in the dealer network in the UK. 

Lease prices were going up, but I had a quote valid for 28 days, so I went back and said I wanted to go ahead. I was offered two colours black or gunmetal grey and told everything else was factory order. They delivered - hundreds of miles away - by transporter about 10 days ago and I still haven't paid a penny. 

My lease costs over 3 years are just under £9k. That's a car costing £32k which is likely to depreciate £15 or £16k in 3 years. They were clearly in demand, and Nissan could have sold them at or close to retail, without giving them to a lease company. 

sheslookinhot

Cost of a car to a lease company will bear no relation to the cost of the car for an individual from a dealer.

BOWFER

Nebulous2 said:

troffasky said:

Anyway, I am missing something here...how can it be cheaper to lease than buy? The leasing company has to buy the car too, so where is their profit coming from?

That's something I don't understand either. There were Leafs available about 6 weeks ago and then after the fuel supply issues they completely disappeared. I went to a dealer, had a test drive and was told that I'd have to wait until March / April for a factory order. Another dealer told me there wasn't a single car in the dealer network in the UK. 

Lease prices were going up, but I had a quote valid for 28 days, so I went back and said I wanted to go ahead. I was offered two colours black or gunmetal grey and told everything else was factory order. They delivered - hundreds of miles away - by transporter about 10 days ago and I still haven't paid a penny. 

My lease costs over 3 years are just under £9k. That's a car costing £32k which is likely to depreciate £15 or £16k in 3 years. They were clearly in demand, and Nissan could have sold them at or close to retail, without giving them to a lease company. 

Yeah, when I bought mine on 6th August there were a good 5 or 6 to choose from.
Even the rare ceramic grey, which I chose.
Then then disappeared bloody quickly and a colleague was very lucky to get a hold of a cancelled order one on Saturday.
Pure chance.