Do I stick with leasing or bite the bullet and buy 2nd hand...

Wishywashy74

I've been leasing cars on a 2 year basis since about 2014, in 2016 I got divorced and just carried on with the leasing option every 2 years, basically paying a monthly fee then every 2 years putting in around £2k every time I got a new deal.

In 2022 I actually started to think about getting away from leasing and maybe buying a 2nd hand car but the 2nd hand market was insane so I got another lease option.

I'm now at a point where I need to consider another lease deal but this time my lifestyle is possibly about to change with my partner and I moving in together, this will free up a load of mine and her finances as we will both be mortgage free.

So do I now consider a 2nd hand car and then at least at the end of it I will own something outright potentially? Only thing is I don't have a car to part ex and I'm loath to take a big chunk out of my savings but instead of giving a lease company £2k I was thinking maybe a deposit of £5k down on a pcp or hp deal then see where we are with regards to finance in 3 or 4 years time as to what I would do next with the car.

Totally unsure of what to do but I know deep down I need to move away from leasing especially as over the last few years all the good deals have dried up and leasing is definitely more expensive. For example back in 2016 I got a Kia Sportage for £116 per month, the equivalent car would be around £320 now...

Thoughts...

daveyjp

Thoughts.  Don't use a PCP for a used car. It is rarely a cheap option.  You lose your deposit in the deal and then have to fund the balloon or borrow again in a few years with another deposit to be paid,

Unless you can get a loan or hp for less than 5% interest if you have the funds buy outright and pay yourself back over 2-3 years.

theoretica

What are your savings for that doesn't work with using them temporarily and rebuilding them?

Wishywashy74

I’d be comfortable using £5000 as a deposit but not say £15k as I do like having a savings account where if I lost my job I’d be able to live ok for 18months…

Brie

Don't forget to look at options like using a credit card for the purchase.  I've done this a few times, once an outright purchase on a 0% deal and other times buying on one card and then balance transferring that to another with a 0% deal.  So there's the one off fee but free credit otherwise as long as you are comfortable with BTs or MTs and know you can pay the full amount off at the end of the term.  

motorguy

Wishywashy74 said:

I've been leasing cars on a 2 year basis since about 2014, in 2016 I got divorced and just carried on with the leasing option every 2 years, basically paying a monthly fee then every 2 years putting in around £2k every time I got a new deal.

In 2022 I actually started to think about getting away from leasing and maybe buying a 2nd hand car but the 2nd hand market was insane so I got another lease option.

I'm now at a point where I need to consider another lease deal but this time my lifestyle is possibly about to change with my partner and I moving in together, this will free up a load of mine and her finances as we will both be mortgage free.

So do I now consider a 2nd hand car and then at least at the end of it I will own something outright potentially? Only thing is I don't have a car to part ex and I'm loath to take a big chunk out of my savings but instead of giving a lease company £2k I was thinking maybe a deposit of £5k down on a pcp or hp deal then see where we are with regards to finance in 3 or 4 years time as to what I would do next with the car.

Totally unsure of what to do but I know deep down I need to move away from leasing especially as over the last few years all the good deals have dried up and leasing is definitely more expensive. For example back in 2016 I got a Kia Sportage for £116 per month, the equivalent car would be around £320 now...

Thoughts...

Lease and PCP prices have went up greatly.

You are not alone in finding its not the compelling offering you once found it to be.

Personally - i'd take a cheap bank loan out for a period and monthly payment you're comfortable with and go buy a good, used car.

There are lots of sensibly priced cars out there at pretty much any budget point.

Arunmor

OP the car market is on shaky ground at the moment with the commission on finance debacle coming to a head.  Couple that with sales of ICE cars of 22% as a percentage of EV sales and that percentage will drop gradually until 2035 when 100% have to EV. EV sales have dropped because they are not the panacea the early adopters claim. (Not sure that is going to happen though suspect the public will riot before then).

It's all a bit of a muddle at the moment.  Read more about what's going then you will have to pay your money and take a chance.  Here's one article.

https://www.forbes.com/sites/neilwinton/2024/09/13/european-automakers-want-co2-rules-eased-to-avoid-punishing-fines/

Wishywashy74

Ok thanks, I'm starting to wonder if I should just go for say 3 or 4 year SUV, something like a Ford Kuga or Evoque on a deposit and HP deal or bak loan if the rate is low enough...

Ectophile

Wishywashy74 said:

Ok thanks, I'm starting to wonder if I should just go for say 3 or 4 year SUV, something like a Ford Kuga or Evoque on a deposit and HP deal or bak loan if the rate is low enough...

If it's an Evoque, make sure that the finance payments finish before the warranty runs out.  You don't want to be paying off finance at the same time as forking out a load of money to the garage because the Evoke has gone wrong again.

flashg67

.. or at the very least, avoid the 2.0 diesel Evoque and go for the 2.2

Goudy

Ectophile said:

Wishywashy74 said:

Ok thanks, I'm starting to wonder if I should just go for say 3 or 4 year SUV, something like a Ford Kuga or Evoque on a deposit and HP deal or bak loan if the rate is low enough...

If it's an Evoque, make sure that the finance payments finish before the warranty runs out.  You don't want to be paying off finance at the same time as forking out a load of money to the garage because the Evoke has gone wrong again.

Yes, this is something you've not had to worry about until now.

It's not just the Evoque, any used car bought on finance with a short warranty could leave you in a position of paying the finance and expensive repairs, (just replace could with will in regards to the Evoque).

If you're on or near your limit financially with the payments, it can come as a massive shock and major problem when they develop an issue that requires a lot of money to put right.

Just a quick scroll through recent threads will give you an idea of the size of this sort of problem, there's probably one a week on here in that position.

If you are going to go down the finance a used route there are other options.

Some manufacturers offer longer standard manufacturer warranties. So you could buy a 4 year old car with 3 more years warranty on it.
You need to make sure the actual car you are buying still qualifies for that warranty still, not all do, even ones on a main dealers forecourt might have not been serviced on time so forfeit the warranty. Check, check and check again.

Toyota do up to a 10 year/100,000 mile warranty extension with every dealer service.
So keep it in the dealer network for servicing and they'll put another years warranty on it up to 10 years or 100,000 miles.
I know a couple of people that have had good use out of this and warranty claims have been pretty much effortless.