Buy a car outright or lease?!

joshhbowenn

Hi all,
stuck on a decision to lease my next car or buy outright. Both have their pros and cons, unsure which is best financially. I’ll try to lay it out clearly below. 

Buy outright:
No monthly payment, but use all money from current car being sold. Car approx 70k miles. 13ish plate. 

- No left over money from sale of current car. £200pm into savings would leave me with £4800 after two years. 

Lease (2year):
£235 monthly. Lease car value is £31,000. 

- Would have £3K profit from selling current car to put into savings. Plus £100 a month would leave me with £5400 after two years. 

So leasing gives me a chunk into savings but monthly payments. 

Buying outright means nothing into savings, no monthly payment for car, but still need to put £200pm into savings to build it up. So would I see the actual monthly saving as it’s going into savings?! 

Hope its laid out correctly to understand. I’ve been going back and fore both options as they both have pros and cons. 

Appreciate anyones opinions and views. 

Grumpy_chap

joshhbowenn said:

Hi all,
stuck on a decision to lease my next car or buy outright. Both have their pros and cons, unsure which is best financially. I’ll try to lay it out clearly below. 

Buy outright:
No monthly payment, but use all money from current car being sold. Car approx 70k miles. 13ish plate. 

- No left over money from sale of current car. £200pm into savings would leave me with £4800 after two years. 

Lease (2year):
£235 monthly. Lease car value is £31,000. 

- Would have £3K profit from selling current car to put into savings. Plus £100 a month would leave me with £5400 after two years. 

So leasing gives me a chunk into savings but monthly payments. 

Buying outright means nothing into savings, no monthly payment for car, but still need to put £200pm into savings to build it up. So would I see the actual monthly saving as it’s going into savings?! 

Hope its laid out correctly to understand. I’ve been going back and fore both options as they both have pros and cons. 

Appreciate anyones opinions and views. 

What is the reason to change the current car?

Are you comparing like-for-like vehicles between the purchase and the lease?

What annual mileage does the lease permit?  What is the excess mileage charge if that is exceeded?

DrEskimo

joshhbowenn said:

Hi all,
stuck on a decision to lease my next car or buy outright. Both have their pros and cons, unsure which is best financially. I’ll try to lay it out clearly below. 

Buy outright:
No monthly payment, but use all money from current car being sold. Car approx 70k miles. 13ish plate. 

- No left over money from sale of current car. £200pm into savings would leave me with £4800 after two years. 

Lease (2year):
£235 monthly. Lease car value is £31,000. 

- Would have £3K profit from selling current car to put into savings. Plus £100 a month would leave me with £5400 after two years. 

So leasing gives me a chunk into savings but monthly payments. 

Buying outright means nothing into savings, no monthly payment for car, but still need to put £200pm into savings to build it up. So would I see the actual monthly saving as it’s going into savings?! 

Hope its laid out correctly to understand. I’ve been going back and fore both options as they both have pros and cons. 

Appreciate anyones opinions and views. 

How are you able to spend £235/month on the lease, and also save £100/month into savings, but buying a car would only give you £200/month to save? Where is the other £135/month going?

Does the lease not have an initial payment? 

Grumpy_chap

Is the OP referring to true lease or PCP?

£235 per month of £31k car on two-year lease seems competitive.

Flight3287462

Grumpy_chap said:

Is the OP referring to true lease or PCP?

£235 per month of £31k car on two-year lease seems competitive.

Sounds a lot better than competitive.  Sounds far too cheap to me.

OP what car is it?

If you can get this deal take it.   Making predictions on second hand prices especially at the moment is not easy.  But if we assume a car loses 50% over three years then it would have cost £15.5k whilst the lease cost is only about £8.5k.

OP needs to clarify all the figures and cover all costs (eg deposits)

Catplan

Should you not be looking at cost of owning the car over the term?

If it was me I’d be comparing monthly cost x term off lease compared to purchase price and what I’d reasonably expect the value to be at end of the two or three year lease term. 

Unless you compare total income against total outgoing I think it muddles things, work out the cheapest way to drive the car. 

Grey_Critic

Changed our car in January last year - Trade in and cash. Bank balance is now back at the same level and have had a heavy year financially. I also never buy brand new - let somebody else take the depreciation hit.

Flight3287462

Grey_Critic said:

Changed our car in January last year - Trade in and cash. Bank balance is now back at the same level and have had a heavy year financially. I also never buy brand new - let somebody else take the depreciation hit.

What depreciation?  At the moment nearly new cars are selling for a premium to new prices.  Strange times.

Grey_Critic

What depreciation?  At the moment nearly new cars are selling for a premium to new prices.  Strange times.

I agree but a few years ago the *Red Hot* housing market took a dive with lots of people in negative equity - only a matter of time before the Motoring Market goes the same way.

joshhbowenn

Flight3287462 said:

Grumpy_chap said:

Is the OP referring to true lease or PCP?

£235 per month of £31k car on two-year lease seems competitive.

Sounds a lot better than competitive.  Sounds far too cheap to me.

OP what car is it?

If you can get this deal take it.   Making predictions on second hand prices especially at the moment is not easy.  But if we assume a car loses 50% over three years then it would have cost £15.5k whilst the lease cost is only about £8.5k.

OP needs to clarify all the figures and cover all costs (eg deposits)

Yeah it was a crazy deal. 

It’s £2k deposit (they put an extra £700) and £235pm for a Golf R-Line Etsi with upgraded paint. 

I put this to order last November as there’s no fees to order or cancel. Currently the deal is back to £330pm and £3K + deposit. 

joshhbowenn

Grumpy_chap said:

Is the OP referring to true lease or PCP?

£235 per month of £31k car on two-year lease seems competitive.

This is a lease. Current car was PCP and wouldn’t do that again…
it’s a Golf R Line Etsi on the lease.