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to want to buy a new (second hand) car rather than lease a new car

(181 Posts)
Hotfootit Thu 12-Oct-17 13:10:23

We have two cars. Our second car is breaking down and the MOT is due very soon. Our first (family) car has been in the garage for 6 weeks and we have tried to manage with one car. We can just about do it, but it's a real performance and we've had ask for lifts to out of school activities (not being a CF as we've given most of these friends reciprocal lifts at one time or another).

DH wants to look into leasing a new car (is it PCP?). I think I would rather buy second hand and then we will will own the car (might have to buy with a bit finance, we're not sure yet). We've had what is now our second car for 12 years - we bought it second hand and it was our only car for 9 years, and was the first car either of us had ever owned - so we're not into changing cars regularly. What are the benefits of a leased car?

x2boys Thu 12-Oct-17 13:14:04

I would guess the main benefit is if something goes wrong its not yours so someone else has to pay to fix we have only ever had second hand cars though too.

SusanTheGentle Thu 12-Oct-17 13:15:00

I ran the numbers recently when buying a car and PCP was alwa more expensive overall. Cheaper in the short term, but cost more than just getting a car we could afford to put most of the money in for then getting a loan from the bank for the rest. PCP is designed to trap you, too, so you can never pay off the final bubble payment and keep having to swap cars to keep the deal going.

ExConstance Thu 12-Oct-17 13:17:07

I work in care and most of my colleagues who work in the community have small cars that they get on a PCP, advantages being almost guaranteed reliability and not much to pay each month. I bought mine on a PCP to secure extra discount ( they just won't give you a good price for cash) I then paid it off the next day and saved myself a couple of thousand pounds. The dealers knew I was doing this and were happy to help. I'll now take out a bank loan and pay it back over the time it would have been on the PCP so I'll then own the car. Worth thinking about as I have a new car for little more than the cost of a second hand one.

MrTrebus Thu 12-Oct-17 13:17:12

The PCP bubble is shortly going to burst, it massively impacts your affordability if you go for a mortgage or other loans or finance later on and overall it's so expensive and not worth it. But all people see is "I can have a brand new beemer for £300 per month" just buy a second hand/nearly new car - you are correct!

VeniVidiWeeWee Thu 12-Oct-17 13:21:25

Have a look at the Honest John website. There's lots of good advice there.

MatildaTheCat Thu 12-Oct-17 13:25:10

Not all lease cars are new, the older the cheaper.

Look for a second handed Motability car, there have been thousands returned since the bastard PIP assessor changed the awards on the disabled, meaning they have returned their cars, usually very low mileage and fully maintained. If you get a cheaper brand such as Honda you could get years of relatively cheap motoring.

ShellyBoobs Thu 12-Oct-17 13:26:34

Leasing and PCP are completely different.

Don't confuse the two.

HotelEuphoria Thu 12-Oct-17 13:26:40

I am actually horrified by the number of people that lease these days, it's just something else to keep up with the Jones'.

Bank loan on the lowest rate possible (not car finance) and pay it off over the shortest possible time. Then if funds allow it change it when the loan has been paid off and start again possibly with a better/newer car.

I did this for years until (eventually after many years) I was at the point that I can but a nearly new car cash and have no bank loan or finance.

AJPTaylor Thu 12-Oct-17 13:31:58

pcp you are basically paying for the depreciation on the new car. upside is that you will always have a reliable car changed just before mot.

ShellyBoobs Thu 12-Oct-17 13:39:01

I am actually horrified by the number of people that lease these days, it's just something else to keep up with the Jones'.

You do realise that not everybody cares what anyone else thinks about their material possessions?

PCH (leasing) is often (not always) cheaper than buying a car, running it for 3 years, selling it, then buying another. There are some brilliant lease deals if you keep an eye out.

My OH had a car on lease which was roughly £600 per month, so £7k per year, for 3 years.

If he'd bought that car it was £72k and would have been worth roughly £35k after 3 years. He would have been bored by then and would have sold it having lost £16k more than if he'd leased it.

There are similar examples at all price ranges.

If you want a new car it could be any one of 4 or 5 funding methods that's cheapest. It depends on the offers available.

My current car was cheaper on PCP than paying cash due to the finance incentives available. You are free to pay off a PCP deal at any time, without any penalty, having taken advantage of the extra discounts.

I've had great lease deals, have paid cash, and have used PCP depending on manufacturer's deposit contribution.

It's naive to say that any funding method is preferable to another, without having the full details of the deals in front of you.

safariboot Thu 12-Oct-17 14:01:08

YANBU.

In my view Personal Contract Hire and Personal Contract Purchase are best suited for people who want a new car every two or three years. If you're happy to keep a car for 5 years or more I think other options are better.

And reliability isn't guaranteed with a new car - as was hammered home to me when I was sitting on a motorway verge next to a family member's 15-plate Audi. (I don't know his exact finance arrangements, but he's then had to pay out £££s to get it fixed, warranty wouldn't cover it)

Fecks Thu 12-Oct-17 14:13:02

bought mine on a PCP to secure extra discount ( they just won't give you a good price for cash
Flipping genius why didn't I know that?
We recently bought a nearly new car and dealer wouldn't budge a penny on price -. He was quite up front about the fact that he did better out of PCP. We paid cash.

Wiggler1 Thu 12-Oct-17 14:38:54

Problem with PCP/HP is when things start to go wrong you have to get them repaired at a main dealers, and any bumps and scratches you wouldn't bother with on your own car need to be repaired, not to mention the time you'll be without a car to get this done. They'll also get you on any excess mileage you do over and above what you've agreed.

I'm in the process of voluntarily terminating my pcp agreement as it's just so expensive, and have bought a cheap little runaround for the same cost as the repairs I've had to get done in the last month. My 'reliable' 5 year old pcp car has spent 3 weeks out of the last 6 in the garage.

I can't wait to just have my little (old) car to manage and will never buy a car on finance again.

thecatsthecats Thu 12-Oct-17 14:46:21

If you're not fussed about your car, get a second hand one. I have a car getting on for 14, it cost me £1300 new three years ago. I've had two 'big' garage bills- £250 and £400. It's been pretty easy going, and it's not even a make reputed for reliability.

Don't let anyone commit you financially to something you aren't comfortable with for the sake of something you don't even want!

Nettletheelf Thu 12-Oct-17 15:07:00

You are definitely not BU!

Once you're in a PCP scheme, you'll be paying forever. Whereas if you buy a decent second hand car you either pay cash upfront or get a loan over 2-5 years. There's an end date to the payments, which isn't the case under PCP schemes.

Loads of people at my gym are swanning around in PCP BMWs, Audis and Range Rovers that they can't really afford. Whilst moaning that they'll never afford a pension. There's £350 a month, into perpetuity, in car payments walking out of the door right there. Fuckwits.

One of my husband's mates asked him when he was going to buy 'a proper car'. The mate is in a PCP scheme. DH is quite happy with his eight year old golf GTI that we bought secondhand for cash when it was three years old, thanks!

19lottie82 Thu 12-Oct-17 15:12:10

There are plenty of great value lease deals out there if you are open to different models, and the deals suit you.

I pay £192 a month for a brand new top spec Skoda Yeti with 10k miles pa, I don't have to pay any tax, MOTs or repairs. That was with no deposit.

Yes Lease is pretty good, they recently had Nissan jukes for £150 a month with no deposit.

BubblesBubblesBubbles Thu 12-Oct-17 15:56:20

We lease, or have a pcp. Dh has a car via work.

Main reason we lease, is I purchased a second hard car cost me 4K and spent 3k fixing it.

Now I pay a monthly amount and have no worries. No servicing (free) no mot, nothing, if anything goes wrong car goes back as it's got a 3 year warranty. If I want this car at the end of the 3 years (which I probably will) I will either use savings or get a loan to pay the remainder.

Badbadtromance Thu 12-Oct-17 16:03:32

I'd never buy a car onPCP . Get a decent second hand one and get the as to vet it first

nocake Thu 12-Oct-17 16:03:52

Make sure you understand the difference between leasing and PCP.

Leasing is effectively renting a car. You pay £X a month and hand the car back at the end of the lease.

PCP (personal contract purchase) normally involves a deposit (although this could be zero), monthly payments and a final payment at the end. Then you own the car.

safariboot Thu 12-Oct-17 16:09:43

Only about 20% of PCP customers pay the 'balloon payment' to keep the car, the vast majority just hand it back. So functionally it's the same as PCH, just with the option to buy at the end of the lease term if you really want to.

Rachyabbadabbadoo Thu 12-Oct-17 16:23:42

Advice generally is to own assets that appreciate (property) and lease those that depreciate (cars).

pisacake Thu 12-Oct-17 16:31:10

Leasing benefits:

* known cost
* new car
* no MOT
* less worries about breakdowns, expensive servicing, etc.
* can be (much) cheaper than buying new
* no need to borrow the full cost

Drawbacks:
* you will need to wait between 2 weeks and several months for the car, as with any car
* you will need to repair scratches and dents before returning
* it's designed for mileage of around 8 to 10,000 a year per but this varies - you do need to be aware of mileage
* it's a fixed term so you will need to arrange a replacement for the end of the term
* any options, such as metallic paint, will cost between 75% and 100% of the full cost if you add them on a lease , whereas the lease cost is probably only around 30% (over 2 years) of the new cost of the car

Note:

Personal lease hire: rental with no option to buy at the end
PCP: optional final payment to own the car or just walk away. If the car is worth more than you owe than you may be trade in for another new car.

pisacake Thu 12-Oct-17 16:32:41

"Problem with PCP/HP is when things start to go wrong you have to get them repaired at a main dealers, and any bumps and scratches you wouldn't bother with on your own car need to be repaired, not to mention the time you'll be without a car to get this done. They'll also get you on any excess mileage you do over and above what you've agreed."

This is not true, you can repair at any dealer. They are not allowed to restrict you to main dealers. You don't need to actually repair the bumps, you can just pay a fee when you hand the car back, there's a standard tariff. If you sell a used car you will pay for these dents in the lower price.

SomewhatIdiosyncratic Thu 12-Oct-17 16:37:40

We own our own cars, both purchased within their first year considerably cheaper than their new price. Mine is now 9 years old and has had nothing more than routine care like tyres, batteries, brake pads etc. (It is quite low milage and had been driven gently with little urban driving) DH bought his a couple of years later with a bank loan as our savings had recently been plundered. Again, little maintenance has been required. We've both been much better off for owning and managing them ourselves.

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