Leasing…is it better than buying?

GoldenOldy

Good Morning

I only travel around 5,000 miles a year now.
I need a car that I can ge5 in and out of easily, and I have trie a Hyundai Tuscon which seems to fit the bill.
The one i was looking at is brand new, and comes with 5 year warranty , which will be good at my age.
The one i saw is a hybrid that you dont plug in ( I dont want to plug in a car for many reasons).
It costs about 40,000 with all the bells and whistles…you can put 1/3 down and pay the rest two years interest free.
Somebody mentioned leasing a car may be better…From what i’ve seen on 4 year deal you put down say 4k and then pay 4k a year.
Does anyone happen to know the advantages and disadvantages of leasing please?
I had never even thought of it and so have no idea.
Also with these new hybrids, a neighbour told me that the insurance is really high, and when you change 1 tyre , you must change 4 as they are an all wheel drive (whatever that is!)
it was a bit easier for me when it was petrol v diesel and i have kept my car for coming on 17 years.

thankyou for any guidance or help.

born_again

Well leasing means at the end you walk away having spent £20K (your figures) & have no car at the end so have to start again. At least buying outright, you have something at the end.
Other will be along to argue the points as well.

Have a hybrid myself. No dearer than usual.

Assume the comment about tyres is because it is a AWD, which in reality they are not, as they are front wheel drive & rears will kick in when wheel spin is detected.
As this works on sensors, having tyres with a large difference in wear can cause problems.

Grumpy_chap

The OP has not said what they intend to do after 4 years if they chose the leasing option.
I assume that the OP is not viewing this as their final 4 years behind the wheel and, taking the OP as a whole, would likely buy a  brand new car now and keep that car until it (the car) reaches the end of life.
On that basis, the leasing is a poor option for the OP because they will be £20k down and have nothing in 4 years. 
Buying the car outright, the OP has paid £40k (which it seems they are able to afford) but still has the car to continue using for the next 15 or whatever years that the car lasts for.  (This includes one further year with the car under warranty).

The finance 1/3 down followed by two years interest free will be a manufacturer incentive and available from any Hyundai dealer.  The OP should ensure they are getting the car at the best possible price.  Use the online tools such as Drive-the-Deal, Broadspeed, CarWow to get a feel for the level of discount available.

Insurance rates can be checked online with the help of a meerkat.

The comment about tyres is a red herring so far as I am aware.

Obviously, this is MSE and no thread like this would be complete without someone commenting that for 5k miles per year a brand new car is far from the most MSE solution.  That is correct but I say, if the OP wants a brand new car and can afford a brand new car (which it sounds like they can relatively easily), then go for it and enjoy

EssexExile

I like to buy, then it's my car so I can do what I like with it. I usually keep them for a decade or so.

ontheroad1970

So a 40k car now, after spending half of that value in the next 4 years you are then looking at probably around 46 - 50k for a like for like car, so instead of keeping a 40k car for 8 years at 40k, you are spending around 45k over 8 years leasing and have handed 2 cars back.  

There are advantages to some for leasing, but if you have the resources to pay a third deposit and then finance the rest on HP at 0%, it's a no brainer.  Do the HP.  

Nebulous2

We have one vehicle, bought outright on a pre-registered deal pre-covid. We intend keeping it a long time, as it meets our needs. 

I retired and took a part-time job 25 miles away. For the previous 12 years I had worked close to home and cycled to work.  I found I was getting sucked into working extra days and decided to blow some of my earnings on another vehicle, mainly as a toy, leaving my wife with our main vehicle. 

I leased an electric car. 10,000 miles a year over 3 years. Total cost for 3 years lease, just under £9,000.

Reasons for leasing?

I didn't know what second-hand values were going to do. I couldn't believe that second hand vehicles were going for more than the new cost, and didn't expect that to last. I've been used to a car being worth half its new cost at 3 years. 

I didn't expect to have a need for a second vehicle beyond 3 years. 

I knew I had the income to pay the £200 a month without worrying about it. 

So far I'm happy.

I didn't realise that the value of second-hand  EVs was going to fall off a cliff, but they have. My car was £32k when I got it, and as it stands will be struggling to make £15k at 3 years old. I'll have driven a car with £17k depreciation, at a cost of £9k, meaning the leasing company has taken that hit and not me. 

Barkin

Grumpy_chap said:

The comment about tyres is a red herring so far as I am aware.

Agreed. Sounds like something Kwik-Fit would try to tell my mum. 

Grumpy_chap

Nebulous2 said:

My car was £32k when I got it, and as it stands will be struggling to make £15k at 3 years old.  

Historically, I don't think that is exceptional.
Quite common that a car is at around 40% of list at 3 years old.  Your car will be at 47% of list.
I think the recent couple of years with inflated used car prices (for all the various reasons) have skewed a lot of expectations from what the norm has been for decades.

Of course, 40% of list at 3 years old does not mean that the lease company took a hit of that amount (60%) once all the hidden discounts are factored in.

Bigwheels1111

I like to purchase outright, then keep for 10-15 years.
Have you looked at brokers for a better price ?.
Drivethedeal, car wow, cars2buy, Autoebid, carfile, broadspeed, new car discount, Nationwide cars.
To name a few.
Get a quote and then bash your local dealer on the head with it.

Nebulous2

Grumpy_chap said:

Nebulous2 said:

My car was £32k when I got it, and as it stands will be struggling to make £15k at 3 years old.  

Historically, I don't think that is exceptional.
Quite common that a car is at around 40% of list at 3 years old.  Your car will be at 47% of list.
I think the recent couple of years with inflated used car prices (for all the various reasons) have skewed a lot of expectations from what the norm has been for decades.

Of course, 40% of list at 3 years old does not mean that the lease company took a hit of that amount (60%) once all the hidden discounts are factored in.

I get that, but I certainly would have taken that hit if I had bought it myself. 

Something I forgot to mention, I test drove the same car, a Nissan Leaf, and the dealer was telling me that there wasn't a car available within the entire dealer network, and I would have a 6-9 month wait to get one.

I had already had a quote from the leasing company, valid for 30 days, and chancing my arm I went back to say I wanted to take it. They offered me two, black or grey, with delivery in 3 weeks. I've no idea why they had two, with none available elsewhere, but I can be quite impatient, and certainly didn't want to wait 9 months. 

GoldenOldy

Well, what a lovely lot of information! I couldnt have asked for more. Thankyou for the clarification about the tyres. And also for the recommendations of people to go to other than the dealer themselves. I think on reflection its going to be a purchase. Grumpychap and nebulous,born again, and all of you, double thanks.

I am just going to push your abundant goodwill a little further and ask..1. Do you trust cars that are demonstration cars, 2. Are these no plug hybrids ok, or do you think i would be safer to go for petrol? If I had my wish come tue, i would buy this car and it will see me out , I dont like buying things as I worry about making the wrong decision and to be honest, I really cant understand all this information about electric powertrains running an engine , and how they all seem to have different goings on ie lexus non plug in, versus nissan quashqui versus hyundai. !