Do you own or lease your cars?

[Turkeycondundrum]

We currently own two cars. Both bought second hand with cash when we had some spare. They are not fancy cars, one is 4 years old, one is just over 10. We want to replace the older car, it's got high running and maintenance costs and we need something bigger as we now have two growing kids. So, we want to trade it in and get an estate. This time round, we have no spare cash and don't want to deplete our savings.

My DH is desperate for a 'nice' car and has worked out that we can afford to lease a fairly decent car. So we pay a monthly fee and then after 3 years, we just hand the car back and get another one.

I think we would be better off buying a decent second hand car on finance. But the monthly repayments are higher and the car isn't so nice. But at the end of it, we at least have an asset to our name.

DH is convinced lots of people lease their cars - and why their cars are much fancier than ours. I'm not sure he's right!

So anyway, long story short, do you own your car/s or lease?

[GaraMedouar]

Doing 20k- 25k miles a year, is that better leasing or buying? I seem to spend so much on my oldish car. It's a 10 reg and I had to have a new clutch last year at the service, plus a new handbrake during this year. Mot and service due next week and I've got a warning light on which I'm sure will cost me an arm and a leg. I'm happy with a plain cheap car - but thought my mileage was to high to think about leasing.

[EnidButton]

Own a brand new car, own a 'used as tester' car. DH doesn't like the idea of leasing but we did seriously consider it for the brand new one. Cars go down in value immediately so leasing seems to make sense if you're going to be trading it in every 4 years to have the latest model. Bit like people do with phones.

I agree with your DH. I do think that's why some people can have expensive looking brand new cars that they change regularly when they appear to have roughly the same income and lifestyle as you do.

But, ignore what anyone else is doing. They're not you and only you know what your finances and needs are. Sit down and make a budget to see which option is the most affordable for you.

[GiantKitten]

GaraMedouar

Buy. Leases aren’t designed for high mileage.

Have a look at Kia or Hyundai - both do a 100,000 mile warranty, & Kia at least have a guaranteed used car scheme. DH used to do 30,000 miles a year & we’ve had 2 nearly-new Kias.

[Jduh]

Lease one car and I want to get out of it and get a secondhand car instead. For us it's not worth the payments each month and the servicing is £200+ a year on top.
My DH has a 10 year old Peugeot which he bought for £1000 2 years ago and it's been much more cost effective. Although I know we've been lucky there.

[GiantKitten]

Details of Kia scheme

www.kia.com/uk/used-cars/

[Imperfectsusan]

I own but keep cars for a good while and do t spend a fortune. I don't feel a car style s important, though reliability is.

[Roo84]

We are in a very similar situation at the moment and have been thinking about both.
We are leaning more towards buying something around £10k, using some savings and taking out a loan. Both loan and lease costs would be around £200pm for 3 years, so approx £7k. At least after 3 years we will them (in theory) own a car worth around 7k (looking at current figures on cars 3 years older than the ones we are looking at). If we lease we would have paid out £7k and have nothing to show for it!
We also have two young children/toddlers and a dog, and therefore worry that I'd be constantly worrying about a lease car getting trashed.
The thought of not having to worry about any issues and driving a nice new car does attract me though...

[Megan2018]

My old petrol car cost me £160 in fuel £65 in insurance, breakdown, tax, £50 maintenance plus the cash to buy it (£5k) that depreciated.

Lease car was £280pm, £45 to charge and insure. No maintenance, no risk.
I know what I’d rather have!

[Japanesejazz]

I lease because I do have high mileage for work, I’m allowed 60k over the 3 years I have the car, had current lease car for 14 months and done 19000 Miles in it, the car I have owned from new is 12 years old and has done 85000 miles, use it for holidays, towing and getting to work in bad weather.

[Lilmisskittykat]

I own my car as does dh. I Always have done... I don't really understand leasing so just stay away from it.

I save 250 a month into an account that covers tyres, service etc plus builds up a reserve so when it comes to buying the next one hopefully I'll have the cash there... there are some real bargains second hand.

Plus I agree with other posters about liking having a few direct debts commitments as possible.

Everyone I work with does 'the have it for three years swap thing', i think the idea of changing your car regularly is quite attractive. I've never looked at the actual maths behind it

[Believability]

Lease. I can’t see the point in owning cars in this day and age

[Meet0nTheledge]

Own, we've never seriously considered leasing or PCP. We buy reasonably low cost cars close to new (ex demonstrators for example) and keep them for 8-10 years. Having a new car every three years doesn't interest me in the least, I just want something reliable and practical to get around in. I also like not having to worry about scratches and dings and I'd rather save monthly towards the next car than be committed to a lease or similar.

[VanGoghsDog]

Own. Bought with cash.
I'm only on my fifth ever car, I drive them til they die.
I hate monthly outgoings so I pay everything annually or up front if I can.

[Sukochicha]

Own. But it’s 13 years old!

[FunkyChunk]

We've done all options: own, lease (contract hire) and PCP.

We've just taken out a new PCP contract and will keep doing so for the foreseeable future.
I like that we have one monthly payment which will always be the same, no being stung for £500 if a clutch goes for example. The car is also brand new, under warranty, so I'm not having to worry about anything going wrong. The first couple of years road tax is also taken care of.
There is an optional "balloon" payment at the end of the term, but at that point we will just trade in for new.

We paid a 2k deposit for this car. At the end of the term, we should be able to "sell" the car back to the dealership and use any equity to use as deposit for the next one. So, after this one off lump sum, we won't pay any more in future.
For example, at the end of the term, we have £10,000 outstanding to pay on the finance to buy the car outright. The car has depreciated but is still worth £13,000. We then are £3,000 in "credit" which will be used as deposit for the next car.

[Noname99]

funkychunk
I really hope that what you have been told happens but that has not been mine nor my partners experience. Him - Audi / me - BMW.
We were both told the same as you, both put 2.5K desposit down and both drive less miles than average. We were told that by year 3 of the 4 year deal, they’d be calling us to deal early etc etc and even suggested we’d have ‘equity’ to trade at least like for like if not trade up. Turned out to be utter bollocks. When the time came, we both got told lame stories about unexpected ‘flat’ markets (this was a couple of years ago so not brexit) and all sorts of other excuses which basically meant we had to either trade significantly down or pay a further deposit/lump sum just to get the same model car again with higher repayments (inflation apparently!)
BMW also run a huge scam where they have subcontracted out the collection of your old car to a third party. This company collect it and they decide if it’s got ‘fair wear and tear’ and they look to find any excuse to charge you!!! Guess what, they found two scratches and made up some other nonsense and presented me with a 1.5K bill!! And of course BMW were “very sorry madame but it’s not us you know so we can’t help.” I had to go to the ombudsman in the end who dismissed their claim out of hand but they told me it’s a huge scam - as bad a dodgy landlords trying to keep your desposit.
It was utterly awful and I will never ever do PCP again. It’s an absolute scam ☹️

[Timetobookaholiday]

PCP for me, I just traded in my old car, and got more in deposit for my new agreement than I paid.
I need a reliable car for work and I do 15k miles a year, also I don't want extra bills throughout the year, so yes I pay a little bit more to have new car, but I can budget better, and I have a new car every 3 years

[Gingerkittykat]

I bought a year old car, the finance is a lot less than leasing would be including the service plan and at the end of the 5 years have got a car with some value to sell to put down a deposit on another car.

Buying a year old car with low mileage makes a huge difference in terms of price than buying new.

The leasing plans I saw tended to have fairly low mileage limits on them too, something worth looking at in more detail if its what you are considering.

mind you, I wasn't slightly interested in having a nice car, just a basic run around so it's up to you and your husband to decide what you value more.

[ForOldLandsEye]

Ive bought, leased and done PCP over the years and it’s really a case of horses for courses.

If you have cash and dont want a very new/expensive car then buying will be fine but, I spent a fortune on MOTs/service/maintenance/repairs which ate into any saving i hoped to make when buying a £5k car. It was off the road a lot waiting for parts too so i had to get lifts/taxis/the bus for two weeks too. When it came to trading in, i got £400 after being promised £2k. I used it as my deposit to lease a car through a dealer who took a double deposit by accident (so three grand out of my account while i was on holiday). When it came time to hand the car back they tried to stiff me like noname99 said so i just wrote, refusing and justified my stance so they backed down. All in all a horrible experience. That lease was £260 a month.

My current car is a high end model - £2k down and £500 a month on PCP plus £60 for service and Im dreading the handover if previous experience is whats to be expected although its been a great car and so reliable. As for my next car, I’ll probably lease but get a recommendation and not use some dodgy, Skelmersdale-based second hand car dealer. The problem is though, if the car you want is somewhere else, the main dealerships tend to contract out to 3rd parties unless you buy brand new.

Its a minefield.

[ohamIreally]

I have a PCP and very happy with it. Brand new car delivered to my door, affordable monthly payments, final payment of £4K at which time the car should be worth about 9K. I have scraped the alloys a fair bit so would be worried about charges if I were handing it back but I'm not.
It's not a cheap way to buy a car but I didn't want to use savings and it's very convenient which is worth a LOT to me. Intend to pay the last 4K using an interest free credit card again so that I'm not using savings.

[ivykaty44]

My dd did lease a car
Her boyfriend was a geek and thought it would be better to purchase on finance, but when he did his spreadsheet it was actually better financially to lease hire

You can get 3 year old lease hire cars, my youngest has a second hand lease hire agreement and it’s a great car and even better price

[Millie2013]

We always buy outright, second hand but newish, current car is s polo so not horrible expensive cars

[wowfudge]

I'm getting my new lease car at the end of the month. The only thing I'll have to pay for is petrol and servicing. The monthly repayment includes the road tax (which has gone up from £0 to £140 for the class of car now electric cars are what the govt wants you to have).

I'll get a brand new car with breakdown cover.

[Thecrown3]

I had same dilemma as you last year.
I took 7 months to go through all the ins and outs and spoke to people.
The trouble with saying you have an asset at the end, you never get back what you have paid out on any car,cars depreiate massively. I kept both my cars for 12 years and bought them 2nd hand , but at the end they were not even worth £500.
I decided to lease against pcp as I don’t believe the hype that you have equity and have talked to numerous ppl who found the same.
I had to put down x3 months payment up front and now have a monthly cost but it includes breakdown, tax etc. Yes I’ll pay to service it but I was doing that anyway.
If you have an older car, 1 repair if the clutch goes or something big is sometimes a few months lease payments.
It depends what’s important to you.
Having a good safe decent car everyday for my work journeys is far more important than day holidays to me.i can’t believe ppl willingly pay £3k for a week in summer abroad!! ( I’ve done that too) least I have something to show.
Yes if you loose your job you would have to give it up, and get a cheap run around but some ppl have to do that when they own cars too.
As a previous op stated “ horses for courses”.

[Kez200]

Own although I would lease if I bought electric I think, as I would be concerned about the technology being great for 10 years plus.

I think I would worry about scratches and damage costing me a lot on handback with a lease, but that might just be scare stories