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

[Hotfootit]

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?

Total cost £3,120 over 2 years

I am interested. Is it really the case that you can get a 32k car, brand new, for two years, for 120/month?

Also, if the lessee doesn't cover depreciation, who does? I agree, that the car will depreciate by more than 3k over that period. Someone is taking the hit.

Also, ask yourself why dealers are giving generous discounts on list price when you embark on a PCP arrangement

because most people stay on a PCP agreement, they take it out because they will only pay a certain amount a month which suits them, and puts money in the dealers pockets over the long term.

but we pay it off straight away, as soon as we can - so we get the car more cheaply than we can for cash.

Buckingham, oh do tell.

VW Passat Alltrack with high spec (auto, sat nav, leather, etc). £32k to buy but there was a lease deal at £119.99 per month for 2 years.

Total cost £3,120 over 2 years

I really struggle to believe that it's possible to own a 32K car for the first two years of it's life and only pay on average £130 per month.

Or, to look through the other end of the telescope, If it's really possible to get it for £130 a month, the I suspect it's not really a 32K car.

Even if it's true, forget cherry-picked examples, take the first 20 different random examples of cars that people nominate (i.e. not chosen because there's some mad special finance deal) and how many of the 20 will be cheaper via PCP? I suspect none.

In fact, if the PCP terms are available on-line, someone find a list of the top 10 most popular cars somewhere and see how many of them can be had cheaper on PCP. The rules of the game are you are not allowed to change the model or options in any way to get a better deal, you have to get prices on a predetermined car.

Manufacturers do sometimes need to get rid of models that are flops/overstocked, and selling them via PCP could be a way of not devaluing the brand by making it obvious they are giving them a way. If that were the case in the Passat example, what it means is that it's not really a 32K car, even though that may be the cash price.

For the top 10 exercise, another rule of the game is that it's not the list price you need to beat, it's the discounted price offered by on-line brokers.

if you want to take depreciation into account my new car has cost me £60 per month.

I didn't start off buying new, but always work out depreciation for the year and put it away for next time.
I certainly wouldn't want to pay £300 per month for a car!!

Same with phones.
Bought an iPhone four years ago. Sim contract £8 a month. Cost if phone £10 per month ish.

My guess is all this leasing/pcp only makes sense if you are interested in getting a fancy new car. We weren't looking for that. we were looking for cheap and reliable. We bought a car 4 years ago for 2500.

Since I don't keep an archive of good deals I've seen in the past, you'll have to take this as evidence; clearly many people on piston heads found the VW Alltrack deal I mentioned:

www.pistonheads.com/gassing/topic.asp?h=0&f=86&t=1582265&i=20

You think that if you tipped up at a dealership with cash, they wouldn't give you a discount off list price?

Yes. I don't 'think'. I KNOW.

The manufacturer usually funds the additional deposit contribution, not the dealer, so no they won't give you the same discount in that case. BMW for example often puts 15%+ into finance deals ON TOP of whatever discount the dealer can offer.

I thought you were leaving the thread Shelly?

I didn't say I was leaving. I said I was 'done here' with regard to trying to explain the basics to the poster who had no clue how car funding works but was happy to say finance is not sensible.

We're not going to see the evidence base you asked for, are we, Firesuit?

Incidentally, Shelly (I've omitted your boobs), what is your argument about dealer discounts? You don't seem to be very clear about the point you are trying to make. On the one hand you dispute that a car dealer would offer a discount at all for cash. Then you modify it to say that the dealer wouldn't offer the same discount as they might for a PCP arrangement.

Nobody disputes the latter; I think it's pretty clear why a dealer might be keen to draw people into a never ending PCP arrangement! A lovely, endless income stream for the dealer, the manufacturer and the finance company from people who want to drive around in a car they can't afford to buy.

shelley I'm a fan of leasing but I expect the figures you quote need a deposit too, so not entirely accurate?

The figures were accurate - the deal was 3+23 which comes to the total quoted. Some more details should be in the link I posted.

Incidentally, Shelly (I've omitted your boobs), what is your argument about dealer discounts? You don't seem to be very clear about the point you are trying to make

I misread the question, apologies. Yes, the dealer will offer a discount. But the manufacturer won't in most cases if it's a cash purchase.

My mistake for interpreting 'I'm done here' as a flounce

I don't get much of a discount fir cash ...but my motoring is costing me £60 a month (if I sold my car tomorrow) so I don't think there is room for it.

Best deal I did was buy second hand and a year later sell the car for more than I bought it for...

I don't think cars break down as often as they used to. And they are certainly don't age as they used to.
I saw a car in a museum that had been given when it was ten years old. And I remember when a ten year old car was a banger. Now, not so much. The bodywork doesn't rust quite so much and paint doesn't fade as badly. Mechanicals are more reliable, so a ten year old car is still very serviceable.

Interesting shelly, thank you.

So, is there an answer to my question? Who sucks up the depreciation?

So, is there an answer to my question? Who sucks up the depreciation?

All of the very good lease deals (the ridiculously cheap ones) are manufacturer supported so 'depreciation' can't be measured by taking residual value from RRP, as you might for a straight purchase.

Manufacturers will use cheap leases to either get new models out quickly (so that they get seen on the road and then more people visit dealers to buy one) or to shift slow/excess volume without having to offer massive discounts in the showroom which would piss recent buyers off.

If they need to move 300 of a particular car quickly and they're happy to get a steady return of £150 per month for them, then receive them back in excellent condition to sell second hand in 3 years, that's what they do.

If they thought they could sell 300 of them at full price (or near enough to not piss off people who've just paid full price for one) quick enough, they'd do that instead.

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

Oh please. I lease my car, best thing I ever did. My second hand car was so unreliable, couldn't afford all the repairs, kept randomly breaking down and was utterly inappropriate for my needs. Yet everyone claimed it was the best thing to do. Running costs on my 2nd hand car were £150 a month (insurance, petrol, tax, not, services, repairs. My lease is £85 a month plus £40 petrol. Every two years I get a new car and I need a reliable car for work.

My second hand car cost me £3 grand in repairs in 5 years.

I'm not "keeping up with the Joneses" as you seem to think people who lease their cars do, but I'm saving money and I know when I'm coming home at midnight after work, my car is more reliable and won't break down.

Plus I don't have to deal with insurance, road tax, book MOT or services, it's all taken care of. I just drop it in once a year then pick a new car in Jan for collection in March, take car back and swap it over.

I also do work for people who get given car allowances so they also lease cars as it's covered by work.

My DH gets a brand new car every year and that's a company car and people probably think he's in debt or leasing because he can't afford it when the truth is, it's not even his car! His last car was a brand new Range Rover, this year it's a Mercedes and work cover his petrol too.

People shouldn't really jump to conclusions about the cars people drive and assume they are all living beyond their means or foolishly etc.

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

They make it super clear the charge for doing excess mileage and also ask what you want to set your mileage at. Plus a courtesy car is most common if your car is needed in the garage and this is also clear in all paperwork that a like for like car will be given.

My first lease car had a recall, I took it back to garage and they gave me the new model to drive until my car was ready.

it's all on the never never. A lot of my friends brag about their nice new cars while I drive a 5 year old car but they will never own theirs

I will never own my car and that doesn't bother me. Means I don't get the hassle of selling it on or getting it repaired.

I have always owned cars up to 10 years old. Never had to fork out for hefty repairs just the usual like timing belts, brakes, coil springs normal wear and tear. If I added up what I have spent in the last 10 years on my cars it is significantly less than the cost of PCP.

But your experience isn't the same for everyone. My second hand, owned outright cars have cost me more than my lease cars per month and have been a pain to shift after.

However we live in a society where everyone wants everything now. A friend of mine on the minimum wage working 16 hours has a 40k car

We also live in a very judgemental society don't we? You simply cannot assume that everyone wants everything now. That's not why I lease, and as I said in my other post, you are exactly the person who would judge us based on my DH driving a brand new car every year when you actually are clueless about our situations.

Yet somehow you try to take the high ground because you (in your opinion) are sensible (in your opinion) to have bought your car, whereas as everyone else (in your opinion) just want things now that they cannot afford.

I had a discussion about PCP the other day. The nice man at Audi (I was there getting a minor repair) was telling me how common it was. I wasn't interested. I like to pay cash or get a small bank loan.

Some years ago it was viewed as a bit of a status symbol to own a new car. That's going to change. It's going to be more of a status symbol to own a slightly older car (3-4 years old) as that may reflect that you actually own and have paid for the car you're driving. That's interesting isn't it?

I know it's not relevant. I'm just saying.

Some years ago it was viewed as a bit of a status symbol to own a new car. That's going to change. It's going to be more of a status symbol to own a slightly older car (3-4 years old) as that may reflect that you actually own and have paid for the car you're driving. That's interesting isn't it

If you are interested in status symbols then yes. I lease for financial savings and reliability and convenience. I find it incredibly amusing how people who have no clue about my circumstances feel they know everything by the car I drive.

Though I do pay for my car, I pay to lease it.

I'm a real tightwad when it comes to cars. I buy old ones, never spend much more than £1k, and scrap them when they need an expensive repair.

I always research the make and model to see what common problems they have and check that whatever I'm buying doesn't have it, and give them a real thorough check over for things like steering pull, water in the oil and so on. I don't buy diesels as they're so prone to needing expensive stuff like DPFs and so on.

I've had some fantastically cheap results: a £600 Passat that I had for 3 years and cost me nothing save the cost of an MOT, not even so much as a light bulb, a £1,000 A4 that only needed a new lightbulb and a battery over the 6 years I had it and, probably my best ever, an old Escort estate that appeared to be indestructible and only ever needed tyres or brakes replaced (it needed a new thermostat once, but the part was less than a tenner and I fitted it myself in a couple of hours) and I kept for about 7 years. I honestly think that, taking into account the £120 or so I get when I eventually scrap them, it's as near to free motoring as you can get.

I couldn't countenance spending hundreds a month on a car and never owning it, but I suppose if you want new ones, it's slightly less heartbreaking than knowing you've lost thousands the minute you drive it off the forecourt after collection. But PCPs/leases are a long term commitment and you're stuffed if you lose your job and everyone I know who's had one has always ended up in some sort of wrangle about condition or mileage when they hand it back.

leases are a long term commitment and you're stuffed if you lose your job and everyone I know who's had one has always ended up in some sort of wrangle about condition or mileage when they hand it back

I'm on my third lease car, each time it's a 24 month contract as they offer the new car after two years but you can change after three years if you wish, so 36 months.

In the unfortunate incident should I ever be out of work, I am extremely fortunate to have savings and in the event of me being unable to secure employment for three years, I can cover the cost of the car.

I've never had an issue returning and changing cars either but I wouldn't be so presumptuous to assume that leasing is a good experience for everyone.

For me, it's a godsend and essential for my work. When I finish work (19 year's time is the plan!) I can hand keys back and walk away.

The people I've met in real life who actively hate and are against leasing are the same people who spend more than my £85 lease cost on mobile phone contracts or Sky TV which to me seems bizzare, my mobile phone contract is £8 a month and people constantly ask how I survive without a high functioning phone! My phone does what it needs to, unlimited calls, unlimited texts and a data bundle I rarely come near to. I have a new handset too, not an old one and change that every two years.