Car leasing, anyone here do it??

Slight segue if I may…

I’ve always bought ex demo soggy barges (A6’s, 5 series, v70’s), paid cash and kept them for around 5-6 years. I like the initial warranty, condition and general ‘tidiness’ and clearly I’m not overly bothered about ‘brand new’.

I’ve always assumed buying this way ‘has’ to be cheaper than leasing and as above, I have the asset if my circumstances change.

However, that overlooks the fact that lease Companies may be negotiating vast discounts (more than the initial demonstrater depreciation?) which is factored into the value drop over the lease term though presumably, overall depreciation will be the same however the car is ‘bought’.

What are people’s thoughts on the pros and cons of lease vs buy in this circumstance please?

There are some weird comparisons here. Bangernomics (sub £2k cars) is quite clearly the most cost efficient method of motoring. It’s not without its drawbacks but it’s not even remotely comparable with leasing a brand new car. They are opposite ends of the motoring scale.

I pay for servicing for my car – which as noted above probably costs me less than servicing on a leased car. Otherwise the £1k DMF I mentioned and a few minor things. You did notice the £3.5k spare in my calcs above to cover those? A new car is more shiny – a s/h one fulfils all the other functions of a car in just the same way. If you’re happy to pay thousands a year for shiny that’s fine.

I’m enjoying all the people insisting that second hand cars never go wrong while ignoring all the examples of second hand cars that have gone wrong.

As above, new cars go wrong – I’m simply suggesting it’s extremely unlikely you’ll get anywhere near £3.5k worth of going wrong in 3 years (based on a Focus, clearly that amount is related to the cost of purchase/lease – for my Mondeo it would actually be ~£4.5k over 3 years)

Not necessarily. On the face of it my old Focus would have been a great buy as it had been in our family from new and been fully maintained. It was almost spotless inside and out. The clutch would be obvious to anyone with half an idea but the other issues could easily be missed.

Your old Focus was 8-10yo? Not quite comparable with my examples – at that price point you take your chances and if you get a lemon you just get rid and buy another one.

Something isn’t quite adding up with your figures -exactly what car did you pay £12.5k for at 3yo, which you can lease for £250 a month?

The old one whould need more spending on it (Tyres, MOT’s, belts, etc) during the 5 years so that eats in to the £100 saved. Money well spent in my opinion.

£6000 worth of tyres etc.?

Just do the calcs – how much did you spend, how much could you get px after 3 years, how much is the lease. Should be fairly simple, I’ve done some imaginary ones above. Your method is probably the most expensive way of owning a s/h car, should still beat the leasing deals if not by as much (you are correct about their purchase costs, though I’d have expected still more than a demo?) – but you’re in much the same position in terms of expected bills as those leasing for those worried about such things.

@aracer. That’s my view. I think they come out pretty similar in overall cost, mebbies buying just noses it though there’s upside in owning the asset and downside risk in the (hopefully unlikely) event of a big bill.

I know overall it’s not ‘cheap’ but that’s not the aim.

Something isn’t quite adding up with your figures -exactly what car did you pay £12.5k for at 3yo, which you can lease for £250 a month?

1 Series Sport. 12.5k, 9k loan at £170pm.

Replaced with 1 Series M Sport. 2k down then £280pm. It’s not on lease, it’s PCP with option to buy.

£6000 worth of tyres etc.?

No, but as mentioned above I would expect to pay more for a better car.

I’ve got a lease, currently on a £34k car. Soon I will be swapping for a £39k car.

To buy the car on a normal loan over the same 4 yr period would be approx £750 a month + interest.

Currently I pay £340 pm for the lease with full maintenance and insurance. So that saves me approx £20k over 4 yrs, which would roughly of being optimistic what the car would be worth after 4 yrs.

To me it’s hassle free way of driving a nice car.

I’ve done buying cheaper cars outright before, PCP’s etc and my current lease is the nicest ownership experience so far.

Agent007 seems very tense.

No, but as mentioned above I would expect to pay more for a better car.

Yes but it’s often not is it, it’s just a newer car, not better? My 9 year old RS4 is probably better in almost every respect than 95% of all new cars on the road. Yet for what it has cost me to buy and run on a monthly basis over the last few years, it works out roughly the same monthly cost as leasing a brand new Vauxhall Astra, and that’s with me doing roughly 15k miles a year.

I’ve been curious about lease vs buying 3 years old, so I did the calculations for a BMW 320d Msport, 20K/yr. I didn’t spend too long looking for the best deal, but hopefully the one I used is illustrative.

Assumptions: Lease new on 3+35 @20K/yr. Buy 3yr 60K, sell 6yr 120K, finance 3yrs @3%

Lease 422.24/mo, 3(422) + 35(422) = 16,045

Buy 3yr old, 15K purchase price, 435.95/mo, 36(434) = 15,694
Sell 6yr old, 7.5K, 15,694-7,500 = 8,194 depreciation+finance

Add in MOT, VED, and maybe a clutch/flywheel to the older car for maybe 2K, and you’re at about 10K. For simplicity I’ve taken the cost of tyres, brakes, batteries, etc to be the same over both periods. There’s likely to be some additional minor costs in the older too, but I don’t think I can accurately estimate them.

So the lease will cost you an extra 6K over 3 years, or about £167/mo, or about 62% more. Of course, change the variables and assumptions and you can get something wildly different. It’s up to the individual to decide it the costs are worth it to him, but in my mind the costs aren’t “comparable”.

My son was just looking into buying a used car around £10k with a loan to replace a 10 yr old punto ,until he found this -https://www.centralukvehicleleasing.co.uk/vehicle/choose_your_lease/71909/mercedesbenz/a_class/a200d_amg_line_5dr.html
£130 pm with £2k down (sell punto) 8k miles a year, he likes the fact its a new car and does not have to have a £10k loan over his head I kind of agree with him 🙂

yankee, I recently got a quite around £400/month for an m sport touring inclusive of tyres and maintenance. Of course the lease will cost more, but with the buy, at the end of the term you’d be driving a car with 120,000 miles on the clock compared with one with only 60,000. There will be a cost for that!

Careful that’s not as awesome as an RS4.

Careful that’s not as awesome as an RS4.

Is it? Can it be?

Apparently not.

Ah, crossed wires. I thought you were hinting that agent007 was a “surfy” ex member.

Hahaha! That didn’t cross my mind but see why you though that.

Yes but it’s often not is it, it’s just a newer car, not better?

Wrong. Our new car is basically a new version of the old but has more standard kit, inc nav and DAB. The ride has been improved, the engine is quieter and more efficient, the tax is less for slightly better performance and that’s before you factor in it being new and not worn, scuffed, scratched, stained etc. It’s a better car.

My 9 year old RS4 is probably better in almost every respect than 95% of all new cars on the road.

With the greatest of respect, the RS4 is not a great comparison as it’s a different breed of car all together. What will a clutch cost you? A pair of tyres? Exhaust? Proper service?

I’m curious about leasing, but have a (well earned) reputation for being a bit neglectful with cars. What happens if you try to hand it back with a few scratches/dings etc? If, for example, you had an accident, would the repaired car be devalued on return to the leasing company?

Another one here who thinks comparing a lease to a S/H car is apples and oranges really, especially at 5+ years old.

Minor damage is acceptable but has to be minor. Accident damage you will have to repair either using insurance or paying for it through one of their recommend repairers.

So effectively £340 a month, ie twice what you were paying before.

It’s hard to compare exactly with your figures, but if we look just at the headline rate (which is very favourable to the lease deal given the different terms), then you’re paying £4k more for the lease over 3 years – presumably shiny is worth that much to you. Which comes back to people being prepared to spend a lot of money on very ordinary cars.

It’s a box which gets you places. A s/h one works fine at that – it’s a perfectly decent apple. If you think it’s an orange then you’re placing an entirely different value on a car. BTW the pricing I did up there for a Focus you were reselling it at 5yo.

@yankee – your figures look much as I’d expect based on what I’ve looked at.

For 20k a year, which is what his was based on?

A cost for a car with 120k on the clock? He appears to have allowed for a clutch/DMF and another big bill in his calcs, and given how well cars keep going these days 120k miles is nothing. I’m guessing those doing leases don’t drive cars with that many miles so don’t appreciate they don’t actually feel worn out at that.

I really do get that some of you like the new car smell, but I think you’re ignoring the real extra cost because you pay for it monthly. A lot of other more fun things to do with several thousand pounds.

Yep. They are the terms we need at work. There are some great deals on 3 series at present (I think it’s because the new A4 is out).
A car might be OK at 120k, but it will show significant signs of wear, some elecs will have failed etc and there is a fair chance that it will need some investment. Engines may be better equipped to handle high mileage, but it will still be a very used car. My 3 series has 65K on it, and whilst it’s still nice it is worn.
I’m not for a second claiming that leasing makes sense for everyone, but in some circumstances it can be a good option.

Yankee is comparing brand new to a car that costs less of course the monthly payments will be cheaper and yes as he’s buying he has the car left over for what it’s worth. As said and you’ve kind of said it comes down to what you want. I want trouble free motoring a nice car, even if it isn’t an RS4, the car is never mine but I like getting a new car. I like my cars, I like driving, I like driving in comfort and I like to know that each month that’s all I’m paying out.

I got hit badly twice with 2 cars around 4 years old that cost me big bucks to fix, one came at a really bad time so it was a struggle financially and the inconvenience of not having the car. So I tried the lease on an 18 month deal they had at the time so if I found it rubbish it wasn’t for long. I’ve not looked back the big thing was when my Dad took seriously ill a few years ago, I made several dashes to the hospital at various times of night and day. I spent hours at his side before heading home in Various times night and day, every time I knew the car wasn’t going to fail me.

There’s no real right or wrong answer it’s down to preference and what you call an acceptable risk and loss.

With the greatest of respect, the RS4 is not a great comparison as it’s a different breed of car all together. What will a clutch cost you? A pair of tyres? Exhaust? Proper service?

Servicing the fueling the RS4 isn’t cheap for sure. It’s on 90k miles now so haven’t yet needed a clutch or exhaust but last set of tyres was £480 all round – that’s for Goodyear Eagle F1’s, and a general service around the £3-400 mark. Occasionally it’s needed more expensive stuff doing, e.g. a cambelt approx £700, brake discs and pads, again approx £700 all round for genuine Audi stuff.

Yet comparably, if you break down the cost of running the car over the last 3 years plus any depreciation (which has been minimal) then it works out about the same monthly cost as if I was to do 15k miles a year in a brand new leased Astra/Golf/Civic (insert any other basic, bland uninspiring Eurobox here).

I’m not trying to slate car leasing full stop as it can suit some people, just pointing out that for the same monthly cost you could either have something so much more exciting, or if costs are important, save your self a packet by just forgoing the lease and buying yourself something a few years older.

Sadly it seems that saving up for something you want is old fashioned now. Appreciate that once you go down the leasing route then it’s very difficult for you to break the cycle. This is exactly where the car manufacturers want you as a consumer, tying people into expensive 2/3/4 year financial commitments, after which they still don’t have the money to buy outright so it’s onto another 2/3/4 year deal.

With car’s it’s clear that a DAB radio, parking assist, satnav, bluetooth compatibility, a white paint scheme, keeping up with the Jonses and other pointless gubbins etc are far higher up peoples priority list these days than how the car actually drives, feels, handles or performs. People seem to value ‘new’ over ‘good’.

LOL. No offense agent007, but someone who drives a 4.2L petrol car which gets, what 20mpg? shouldn’t be criticizing what others look for in a car!
Don’t get me wrong, it’s very nice but in terms of efficiency it’s a bit of a relic!

For some reason it reminds me of that STW member who stood as a green party candidate, despite having a penchant for souped up subaru WRXs!!!!
It’s not the same, but that always makes me chuckle.

LOL. No offense agent007, but someone who drives a 4.2L petrol car which gets, what 20mpg? shouldn’t be criticizing what others look for in a car!

Not just me then? 😆

Nice cars though.

Don’t get me wrong, it’s very nice but in terms of efficiency it’s a bit of a relic!

Yep about 21mpg average but it’s already been manufactured, and hence is now much more environmentally friendly to keep it on the road than to jump on the bandwagon and buy some supposed Bluemotion Eco VW that does (with cheat box installed) an alleged 60mpg!

Carbon Footprint of a New Car

So all you car leasers upgrading to a new model every 2/3 years are actually doing more damage than you think.

So all you car leasers upgrading to a new model every 2/3 years are actually doing more damage than you think

Mine was already manufactured too.

Yep about 21mpg average but it’s already been manufactured,

You are killing me!

So all you car leasers upgrading to a new model every 2/3 years are actually doing more damage than you think.

Do you actually believe that? Cars aren’t made to order, and used lease cars don’t get scrapped!
As far as crazy rationalisations go, that is CRAZY!!!!

His RS4 magically appeared no one had owned before hand so he could get it just appeared used one day out of thin air.

Guys, think whatever helps you justify your own case but it’s a well known fact that car leasing has massively artificially increased demand for new vehicle production, with the side effects of clogging up residential streets with parked cars (putting people off things like cycling) and effectively making many older vehicles obsolete way before their design lifespans. It’s waste and consumerism at it’s worst!

New car production if you actually bothered to read the link I posted is a very major contributor to CO2 production. Still if it means you get a shiny new motor every 2/3 years then who cares about the planet right? I’ve had the RS4 for 4 years already and can’t see me replacing it in the foreseeable future. A sideline environmental benefit of me having a car that does 21mpg is that it makes me think twice before using it to drive anywhere I could possibly drive/cycle or take the train to. That can only be a good thing.

Guys, think whatever helps you justify your own case but it’s a well known fact that car leasing has massively artificially increased demand for new vehicle production, with the side effects of clogging up residential streets with parked cars (putting people off things like cycling) and effectively making many older vehicles obsolete way before their design lifespans. It’s waste and consumerism at it’s worst .

Ah! They’re all lease cars are they? Ok.

Yes I read your emissions thing. So where do these lease cars that clutter the streets vanish to at the end of the lease?

this got really weird.

Ah! They’re all lease cars are they? Ok.

Vast majority of them yes!

hire purchase is not leasing. If anything is to blame for any uptake in car registrations, as that article says; it’s cheap credit. That applies as much to used as it does to new.

So it blames PCP in that article which isn’t a lease, yeah you were wrong.

Ive just signed up to a leased car as I have a new job that means I need to provide a car no more than 5 years old (car allowance). I’ve also just had another baby so need something big that will fit 3 car seats in. Usually I hunt out a really good secondhand buy and have done pretty well over the years not get no stug for much depreciation or repair bills. I was looking at a Honda Accord 3-4 years old, mostly around 10-12k out of warranty, so quite a punt. I just put a cluch in my 10 year old civic at a cost of £1000 😯

The value of leasing depends massively on the car you are after. I wanted a Subaru Forrester of Levorg, but would have been £600+ per month leased. I ended up with a Nisan X trail (decent spec) for £300 per month. PCP on this would be £450 per month and £6000 up front. If I wanted to own the car at the end I would have had to pay what it was worth.

In this instance leasing is a no brainier. I’ve gone for a 2 year deal as by that time I won’t need something so big and apcan go back to normal estate cars. Also a Subaru Levorg will be about 25% of its list price.

Forgot to mention, no much cop is you do more than about 15k per year.