Is it better to lease/hire purchase a car rather than buy one outright?

[TwinkleWings]

I've always been of the school of thought that's it's best to buy things outright but now I'm not so sure. When I've bought and sold cars (years later) before, they have sold for a huge amount less than what we paid for them. It's just a fact that they're not a financial investment at all.

We now need a new car and I'm wondering if we'd just be in a better position to sell existing one and get some sort of lease/hire purchase etc deal on a new one. We then are able to change in a few years time.

Current car now at the stage where it's also costing us a lot in the odd repair here and there

Hire purchase and lease aren’t the same, do you mean PCP? Getting a loan or finance for a car is the same as buying it.

We lease our car, works for us.

Depends how long you want to keep your car and what your budget is.

For DH leasing is a great idea - he gets bored with cars quickly and enjoys researching and purchasing a new one. He enjoys the status of having a new car without the huge depreciation.It means zero maintenance costs, only downside is annual mileage allowance is low and he has a 70 mile round commute each day.

For me it would not work. I bought my last car when it was a year old and ran it until it was 10 years old. In truth I would have kept it longer, but DH was embarrassed to drive it. Therefore my nit buying new I avoid the massive depreciation, but by getting relatively new I shouldn't have much technical work to do for a few years - also my mileage is pretty low.

I buy second hand and run them to the ground. Works out cheaper than leasing. Having said a car is just something to take me from A to B. I have no interest in cars per se.

I've just bought an 18 month old car.
If I keep it for more than 5 years, assuming I sell it for 0, buying will have been cheaper.
So, probably the trade off time, in my case, is about 3-4 years.

If you want new cars, that time will increase. And different models will also be different.

I’m 50/50 on this. Swingin to lease. Mine has just been in the garage, again. I think when it isnt economical to fix this 1 I’ll go to lease, I just think it’ll be less stressful and time consuming with Mot and repair

Placemarking as in a similar position ourselves at the moment.

We always lease. We just take the view that a car is an expense not an investment, and it costs x amount a month to have a nice car. We change ours every three years.

I’m currently debating this at the moment... I need to offload my diesel car, once l have got my next mortgage agreed

Which ever way you look at it, you will always lose money on cars.

If you buy new you'll lose the most, I've only ever bought one car new and lost 10k in a year.

You can reduce the amount you lose by buying an older, cheaper car and running it into the ground.

I need/like to have a decent car as I do nearly 20k miles a year and drive a lot for work. So leasing or PCP works well for me. I have a set budget per month and I stick to that and accept that I'll never own the car and always, in effect, rent the car. I choose to have a balloon payment on the end, which I can chose to pay and own the car at the end. But I never want to, and I like to change my car regularly. I tend to lease from either Motorpoint or the likes of available car, as the cars are nearly new and I can do the finance via them.

I buy cheap second/third hand ones and run them until they fail. My current car cost me £1900 and is still going strong!

As others have said it depends upon what you want from the car. I've always driven old cars and been relaxed that if I had an accident or it was otherwise BER it want a huge loss. As I've got older I've found I don't have the time and inclination to repair them, also less people are selling their cars privately making it harder (all ways avoid dealers for older cars where possible). So I'm warming to the idea of leasing but I have young kids who could destroy the interior quickly and cost an arm and a leg!

If you're using your car on a daily basis and doing a lot of miles I think leasing a brand new car can make sense. My understanding is you're unlikely to pay tax and most repairs are likely to be under guarantee assuming you lease for 3 years. I'm assuming you'll need to take relatively good care of it, otherwise you'll get rinsed for repairs when you return it.

I’m getting a car on pcp this time as I’m needing my actual savings for house renovations. I’ve got a car that’s 18months old and the monthly payment is low. I’ll “trade it in” rather than pay the balloon payment as I’ve had enough of owning cars and repairing them when old. Like a pp I’m looking at cars now as a monthly expense rather than something I own. My mindset was changed as my house renovations are an investment but spending the same money on a car feels like a total waste.

I bought my last car out right at 3 years old and 15k (seven seater). It ended up lasting 6 years and in sold it for 1k. During that time I ended up spending at least 7k in maintenance. So 21k over 6 years = roughly £300 a month. I'm now spending £450 a month all in for a 3 year lease. So no insurance, tax, roadside etc. Only slightly more for an always new ish car plus no anxieties over anything going wrong.