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Cars - buy or lease?

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JohnB 28 Sep 15 6.05pm
I've always bought cars outright but considering looking at leasing/PCH when I get my next car but can't really work out what's the better option. What does everyone on here do and are there any massive benefits to leasing over buying outright? I figure a £40k car leased over 3 years costs about £20k but you have nothing at the end of it whereas buying will cost you the £40k and you have a £20k car after 3 years so it's much of a muchness.
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JohnB

28 Sep 15 6.05pm

I've always bought cars outright but considering looking at leasing/PCH when I get my next car but can't really work out what's the better option.

What does everyone on here do and are there any massive benefits to leasing over buying outright?

I figure a £40k car leased over 3 years costs about £20k but you have nothing at the end of it whereas buying will cost you the £40k and you have a £20k car after 3 years so it's much of a muchness.

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radsyrendot From Coventry now in Leicester 28 Sep 15 6.33pm
Catch 22 ...I've thought the same wether to go to just add fuel everything else payed for .. Just gotta watch mileage allowance
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radsyrendot

From Coventry now in Leicester 28 Sep 15 6.33pm

Catch 22 ...I've thought the same wether to go to just add fuel everything else payed for .. Just gotta watch mileage allowance

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sydtheeagle England 28 Sep 15 7.03pm
I think that logic only works if you absolutely know you will change your car every three years. Otherwise, you buy a car for 40k and if you keep it for nine years (entirely plausible the way today's cars are made, perhaps at some point passing it on to the wife or kids at some point) then you've spent 60k if you go the leasing route (3 cars x20k) vs. 40k if you bought the new car -- which still has some residual value even after 9 years; a considerable savings. So the answer is first and foremost, it depends on your long-term plans. If you do only keep cars for 3 years then you have more of a decision to make. Edited by sydtheeagle (28 Sep 2015 7.05pm) Sydenham by birth. Selhurst by the Grace of God.
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sydtheeagle

England 28 Sep 15 7.03pm

I think that logic only works if you absolutely know you will change your car every three years. Otherwise, you buy a car for 40k and if you keep it for nine years (entirely plausible the way today's cars are made, perhaps at some point passing it on to the wife or kids at some point) then you've spent 60k if you go the leasing route (3 cars x20k) vs. 40k if you bought the new car -- which still has some residual value even after 9 years; a considerable savings. So the answer is first and foremost, it depends on your long-term plans. If you do only keep cars for 3 years then you have more of a decision to make.

Edited by sydtheeagle (28 Sep 2015 7.05pm)

Sydenham by birth. Selhurst by the Grace of God.

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Casual Orpington 29 Sep 15 8.50am
I'm half way through my 2nd 3 year lease, works well for us. I didn't want 2 years as I don't want to pay the upfront charge that often, didn't go with 4 years as I couldn't be f**ked with mots, warranty finishing etc. I only lease our family car as my mrs only drives about local , doesn't put much mileage on it and generally looks after it. I was thinking about leasing my truck for work, but bought one instead, I don't want to have to worry about driving down country lanes and scratching it up, getting hit with a big bill. We do £700 a month on the family car, but it's a bit of piece of mind, if anything was to go wrong with it , I can just back it and get a courtesy car. If you are going to get any extras put on it, just be aware that they put the whole cost of the extras on the 36 months, so if you have £3600 in extras it will cost you another oner a month ( Liberty really, as they would get a better price for it with the extras when they sell it), so if it's something that you can fit yourself, buy it ( don't pay main dealer prices) and take it off after. Also make sure that you get gap insurance which is the difference between the price it's actually worth and how much you owe, if you drive a £50 grand motor off the forecourt and write it off, you still owe £50 grand but the insurance would pay you out about £44000, the gap ins covers the difference. Get a quote over the phone that you are happy with, then say that you will have it, if they throw the gap insurance in for free, they usually do. I've got a mate in Birmingham who's got a leasing firm TFS, they have been decent. Always talk to an advisor though, as they get better deals from different car firms. So a similar motor, say an BMW X5/Merc ML will work out a lot difference in price. Good luck
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Casual

Orpington 29 Sep 15 8.50am

I'm half way through my 2nd 3 year lease, works well for us. I didn't want 2 years as I don't want to pay the upfront charge that often, didn't go with 4 years as I couldn't be f**ked with mots, warranty finishing etc.
I only lease our family car as my mrs only drives about local , doesn't put much mileage on it and generally looks after it.
I was thinking about leasing my truck for work, but bought one instead, I don't want to have to worry about driving down country lanes and scratching it up, getting hit with a big bill.
We do £700 a month on the family car, but it's a bit of piece of mind, if anything was to go wrong with it , I can just back it and get a courtesy car.
If you are going to get any extras put on it, just be aware that they put the whole cost of the extras on the 36 months, so if you have £3600 in extras it will cost you another oner a month ( Liberty really, as they would get a better price for it with the extras when they sell it), so if it's something that you can fit yourself, buy it ( don't pay main dealer prices) and take it off after.
Also make sure that you get gap insurance which is the difference between the price it's actually worth and how much you owe, if you drive a £50 grand motor off the forecourt and write it off, you still owe £50 grand but the insurance would pay you out about £44000, the gap ins covers the difference.
Get a quote over the phone that you are happy with, then say that you will have it, if they throw the gap insurance in for free, they usually do.
I've got a mate in Birmingham who's got a leasing firm TFS, they have been decent.
Always talk to an advisor though, as they get better deals from different car firms. So a similar motor, say an BMW X5/Merc ML will work out a lot difference in price.
Good luck

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Frickin Saweet South Cronx 29 Sep 15 8.59am
we bought ours on a PCP. Paid around £7K up front, then £125/per month for three years and we can buy it at the end if we want for around £12k, give it back or trade it in for a new model. I reckon we'll probably keep it cause it's got a 7-year guarantee and hardly any miles so should be alright for a good few years as a family car.
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Frickin Saweet

South Cronx 29 Sep 15 8.59am

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we bought ours on a PCP. Paid around £7K up front, then £125/per month for three years and we can buy it at the end if we want for around £12k, give it back or trade it in for a new model. I reckon we'll probably keep it cause it's got a 7-year guarantee and hardly any miles so should be alright for a good few years as a family car.

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Midlands Eagle 29 Sep 15 9.03am
Quote JohnB at 28 Sep 2015 6.05pm I've always bought cars outright but considering looking at leasing/PCH when I get my next car but can't really work out what's the better option. I figure a £40k car leased over 3 years costs about £20k but you have nothing at the end of it whereas buying will cost you the £40k and you have a £20k car after 3 years so it's much of a muchness. You haven't given enough information as it all depends on how long you want to keep the car for. I like to drive a nice car but get bored with them pretty quickly so the PCP route is the best one for my circumstances as I get a far better car for my monthly outlay. As an example Colliers of Birmingham are selling a rather nice looking two year old Range Rover Sport for £37,999 which is available on HP at £1,153 per month over three years or £697 per month on a three year PCP which a £450 per month saving
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Midlands Eagle

29 Sep 15 9.03am

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Quote JohnB at 28 Sep 2015 6.05pm

I've always bought cars outright but considering looking at leasing/PCH when I get my next car but can't really work out what's the better option.

You haven't given enough information as it all depends on how long you want to keep the car for.

I like to drive a nice car but get bored with them pretty quickly so the PCP route is the best one for my circumstances as I get a far better car for my monthly outlay.

As an example Colliers of Birmingham are selling a rather nice looking two year old Range Rover Sport for £37,999 which is available on HP at £1,153 per month over three years or £697 per month on a three year PCP which a £450 per month saving

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Casual Orpington 29 Sep 15 9.04am
Quote Frickin Saweet at 29 Sep 2015 8.59am we bought ours on a PCP. Paid around £7K up front, then £125/per month for three years and we can buy it at the end if we want for around £12k, give it back or trade it in for a new model. I reckon we'll probably keep it cause it's got a 7-year guarantee and hardly any miles so should be alright for a good few years as a family car. If you can find what auction house the company use. You'd be better off backing it,signing up with with the auction house for a list of what's going through it, then buying it from the auction , save a few grand.
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Casual

Orpington 29 Sep 15 9.04am

Quote Frickin Saweet at 29 Sep 2015 8.59am

If you can find what auction house the company use. You'd be better off backing it,signing up with with the auction house for a list of what's going through it, then buying it from the auction , save a few grand.

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Ray in Houston Houston 30 Sep 15 12.08am
A car is a depreciating asset, how ever you buy it, so you're going to lose money on it, guaranteed. Here's the pecking order of money loss, ranked least to worst: 1. Buy a used car and drive the wheels off it 2. Buy a new car and drive the wheels off it 3. 4. 5. 20. Lease a good new car 30. Lease a bad new car Leasing ONLY works if you change your car like clockwork AND do relatively low mileage. If you do high mileage, you pay the accelerated depreciation but the way the lease works is they lend you the money to pay for the depreciation, so you pay interest on it too. That's why leasing good cars is often better than leasing a bad car because the latter will depreciate faster so you pay more in depreciation and even more in interest associated therewith. A lease is far less negotiable than a purchase. A lease payment is made up of two component parts: 1. The depreciation divided by the number of months of the lease 2. The depreciation plus the list price times the monthly interest rate The list price and the depreciation are both pre-ordained amounts that you cannot change, no matter how hard you try; they come straight out of a book. The only things you can haggle over are the downpayment and the interest rate. Dealers will manipulate the downpayment to throw off attractive sounding payments, but you really have to be careful because the downpayment is, basically, dead money. All is does is reduce the list price on which interest is calculated, nothing else. Just do this simple test: get quotes with and without a downpayment; if the difference between the lease payments is less than the downpayment divided by the number of months of the lease, you're getting f*ed. Don't fall into the trap of taking the equity in your old car and using it to fund the downpayment on a new lease. You're better off taking that money and sticking it in the bank (or paying off a credit card). Or putting it on Palace to win at the weekend. Edited by Ray in Houston (30 Sep 2015 12.12am) We don't do possession; we do defense and attack. Everything else is just waing with a football.
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Ray in Houston

Houston 30 Sep 15 12.08am

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A car is a depreciating asset, how ever you buy it, so you're going to lose money on it, guaranteed. Here's the pecking order of money loss, ranked least to worst:

1. Buy a used car and drive the wheels off it
2. Buy a new car and drive the wheels off it
3.
4.
5.

20. Lease a good new car

30. Lease a bad new car

Leasing ONLY works if you change your car like clockwork AND do relatively low mileage. If you do high mileage, you pay the accelerated depreciation but the way the lease works is they lend you the money to pay for the depreciation, so you pay interest on it too. That's why leasing good cars is often better than leasing a bad car because the latter will depreciate faster so you pay more in depreciation and even more in interest associated therewith.

A lease is far less negotiable than a purchase. A lease payment is made up of two component parts:

1. The depreciation divided by the number of months of the lease
2. The depreciation plus the list price times the monthly interest rate

The list price and the depreciation are both pre-ordained amounts that you cannot change, no matter how hard you try; they come straight out of a book. The only things you can haggle over are the downpayment and the interest rate.

Dealers will manipulate the downpayment to throw off attractive sounding payments, but you really have to be careful because the downpayment is, basically, dead money. All is does is reduce the list price on which interest is calculated, nothing else.

Just do this simple test: get quotes with and without a downpayment; if the difference between the lease payments is less than the downpayment divided by the number of months of the lease, you're getting f***ed.

Don't fall into the trap of taking the equity in your old car and using it to fund the downpayment on a new lease. You're better off taking that money and sticking it in the bank (or paying off a credit card). Or putting it on Palace to win at the weekend.

Edited by Ray in Houston (30 Sep 2015 12.12am)

We don't do possession; we do defense and attack. Everything else is just wa**ing with a football.

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jamiemartin721 Reading 30 Sep 15 10.17am
Quote JohnB at 28 Sep 2015 6.05pm I've always bought cars outright but considering looking at leasing/PCH when I get my next car but can't really work out what's the better option. What does everyone on here do and are there any massive benefits to leasing over buying outright? I figure a £40k car leased over 3 years costs about £20k but you have nothing at the end of it whereas buying will cost you the £40k and you have a £20k car after 3 years so it's much of a muchness. Although, after those three years, you can usually keep a lease going, and then get a new car for no additional layout, where as if you owned the car and sold it, in order to buy a new car, you'd still have to find the extra 20k depreciation. "One Nation Under God, has turned into One Nation Under the Influence of One Drug" [Link]
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jamiemartin721

Reading 30 Sep 15 10.17am

Quote JohnB at 28 Sep 2015 6.05pm

I've always bought cars outright but considering looking at leasing/PCH when I get my next car but can't really work out what's the better option.

What does everyone on here do and are there any massive benefits to leasing over buying outright?

Although, after those three years, you can usually keep a lease going, and then get a new car for no additional layout, where as if you owned the car and sold it, in order to buy a new car, you'd still have to find the extra 20k depreciation.

"One Nation Under God, has turned into One Nation Under the Influence of One Drug"
[Link]

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Lyons550 Shirley 30 Sep 15 10.30am
Quote JohnB at 28 Sep 2015 6.05pm I've always bought cars outright but considering looking at leasing/PCH when I get my next car but can't really work out what's the better option. What does everyone on here do and are there any massive benefits to leasing over buying outright? I figure a £40k car leased over 3 years costs about £20k but you have nothing at the end of it whereas buying will cost you the £40k and you have a £20k car after 3 years so it's much of a muchness. Oddly I was mulling over this very same conundrum after having seen the article on BBC.co.uk. Cant say I've come to any conclusion as of yet though! lol The Voice of Reason In An Otherwise Mediocre World
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Lyons550

Shirley 30 Sep 15 10.30am

Quote JohnB at 28 Sep 2015 6.05pm

I've always bought cars outright but considering looking at leasing/PCH when I get my next car but can't really work out what's the better option.

What does everyone on here do and are there any massive benefits to leasing over buying outright?

Oddly I was mulling over this very same conundrum after having seen the article on BBC.co.uk.

Cant say I've come to any conclusion as of yet though! lol

The Voice of Reason In An Otherwise Mediocre World

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Ray in Houston Houston 30 Sep 15 5.06pm
Quote jamiemartin721 at 30 Sep 2015 10.17am Although, after those three years, you can usually keep a lease going, and then get a new car for no additional layout, where as if you owned the car and sold it, in order to buy a new car, you'd still have to find the extra 20k depreciation. As has been said above, leasing works only if you get a new car every few years. If this is your style, then rolling from lease to lease is marginally less bad than buying a new car every three years. If you buy and hold, then it blows leasing away because you retain the residual value even after the car is paid off, instead of handing back to the dealership at the end of the lease. Edited by Ray in Houston (30 Sep 2015 5.08pm) We don't do possession; we do defense and attack. Everything else is just wa**ing with a football.
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Ray in Houston

Houston 30 Sep 15 5.06pm

Quote jamiemartin721 at 30 Sep 2015 10.17am

As has been said above, leasing works only if you get a new car every few years. If this is your style, then rolling from lease to lease is marginally less bad than buying a new car every three years.

If you buy and hold, then it blows leasing away because you retain the residual value even after the car is paid off, instead of handing back to the dealership at the end of the lease.

Edited by Ray in Houston (30 Sep 2015 5.08pm)

We don't do possession; we do defense and attack. Everything else is just wa**ing with a football.

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Casual Orpington 30 Sep 15 5.37pm
Quote Ray in Houston at 30 Sep 2015 12.08am A car is a depreciating asset, how ever you buy it, so you're going to lose money on it, guaranteed. Here's the pecking order of money loss, ranked least to worst: 1. Buy a used car and drive the wheels off it 2. Buy a new car and drive the wheels off it 3. 4. 5. 20. Lease a good new car 30. Lease a bad new car Leasing ONLY works if you change your car like clockwork AND do relatively low mileage. If you do high mileage, you pay the accelerated depreciation but the way the lease works is they lend you the money to pay for the depreciation, so you pay interest on it too. That's why leasing good cars is often better than leasing a bad car because the latter will depreciate faster so you pay more in depreciation and even more in interest associated therewith. A lease is far less negotiable than a purchase. A lease payment is made up of two component parts: 1. The depreciation divided by the number of months of the lease 2. The depreciation plus the list price times the monthly interest rate The list price and the depreciation are both pre-ordained amounts that you cannot change, no matter how hard you try; they come straight out of a book. The only things you can haggle over are the downpayment and the interest rate. Dealers will manipulate the downpayment to throw off attractive sounding payments, but you really have to be careful because the downpayment is, basically, dead money. All is does is reduce the list price on which interest is calculated, nothing else. Just do this simple test: get quotes with and without a downpayment; if the difference between the lease payments is less than the downpayment divided by the number of months of the lease, you're getting f*ed. Don't fall into the trap of taking the equity in your old car and using it to fund the downpayment on a new lease. You're better off taking that money and sticking it in the bank (or paying off a credit card). Or putting it on Palace to win at the weekend. Edited by Ray in Houston (30 Sep 2015 12.12am) Fk me Ray you are a f**king expert, I'm not taking the piss. Do you work for a leasing firm?if not you should do.
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Casual

Orpington 30 Sep 15 5.37pm

Quote Ray in Houston at 30 Sep 2015 12.08am

A car is a depreciating asset, how ever you buy it, so you're going to lose money on it, guaranteed. Here's the pecking order of money loss, ranked least to worst:

1. Buy a used car and drive the wheels off it
2. Buy a new car and drive the wheels off it
3.
4.
5.

20. Lease a good new car

30. Lease a bad new car

A lease is far less negotiable than a purchase. A lease payment is made up of two component parts:

1. The depreciation divided by the number of months of the lease
2. The depreciation plus the list price times the monthly interest rate

Edited by Ray in Houston (30 Sep 2015 12.12am)

F**k me Ray you are a f**king expert, I'm not taking the piss.
Do you work for a leasing firm?if not you should do.

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