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?

[Orangebird69]

brittbug, what do you lease for £80 a month?

[Everanewbie]

Plenty of dogma here! The fact is that there is no 'best' way to buy a car. if there was, everyone would use that method. It depends on what you want, affordability, deals available etc etc etc.

For example, a friend bought a Fiesta that was 6 months old. She was smug that it was £1500 or so cheaper than brand new. However, upon closer examination, she had it on finance. 8%APR. The new cars had a 0% offer, so actually the used car was more expensive!

Likewise, i've leased a lovely Astra. £156 PM for 2 years. PCP would have been closer to £300. The car costs £24k to buy, and 2 year olds are going for £18,000. I'm leasing it for significantly less than the depreciation, so i'd be mad to buy it outright. However, i'm frightened to death to damage it and will have no asset at the end of 2 years. Plus i'll have to pay 10p per mile above 10k miles p.a. Plus for the good deals you need to flexible on engine size, transmission, colour etc.

My advice is to have an open mind, ignore the ignorant opinions on here, and do your sums.

[Sunshinegirl82]

This has been a really interesting thread. I find it fascinating how singleminded and judgemental some people are about something like this.

The holier than thou attitude of some (not all!) of those who prefer to buy cars outright has really surprised. Like it somehow makes you a superior human being who understands how the world works so much better than everyone else.

[Abra1d]

At 6p per excess mile I don't lie in bed at night worrying about going over my lease mileage. 1000 extra miles would cost me £60.

[Orangebird69]

The same could be said for the pcp fans too Sunshine...

[Orangebird69]

It works for some, not for others. Certainly not for me - for a new version of what I drive now, I'd be looking at a minimum of £502 a month - before any servicing packages, in car extras etc are added. I can afford to run a second hand car so I do. My dsis does pcp as she needs to budget more than I do and wouldn't be able to handle a big surprise bill. PCP in that case is great. Horses for courses.

[habenero20]

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 couldn't care less about owning my own car.

your case seems interesting, although I think you were unlucky with your second hand car costing you 3k in 5 years. we have had ours for 4, and we are pretty ignorant about cars and, excluding MOTS, we have put 500 into it.

I agree however. Ours is a crappy little car. I might go for 85/month for sure, although that certainly is more than we did pay over the 4 years we have had ours, and of course we can sell it.

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.

fair enough. If it seems like they suck it up on certain models.

[Sunshinegirl82]

Most people who lease/PCP have expressed why it works for them but I haven't seen much (any?) criticism of others who make different choices.

There has been a fair bit of "not financially sensible" "daft" "do you really think the dealers are doing you a favour? Really?" coming back the other way though.

I agree it's horses for courses (and have made that point consistently here) there isn't a "correct" way of doing it, it will depend on individual circumstances and priorities.

[StaplesCorner]

I'm glad its not just me who was confused by this - earlier this year we brought our first "new" car for years, as in it was new to us but about 18 months old. We had £7k cash so expected to be welcomed at dealerships. In fact everyone told us how odd it was that we didn't want to lease and that paying cash is something that only "older" people do. "Like my Mum!!" said one bright sales-spark.

My youngest DD was outraged as the car wasn't like all her friends get, where they lease and just go and pick the top of the range model off the forecourt!

[StaplesCorner]

(all her friends' parents that should read - DD doesn't get a new car every year!!)

[wasonthelist]

Maybe we should have a referendum on the best method of car purchases

[safariboot]

We had £7k cash so expected to be welcomed at dealerships. In fact everyone told us how odd it was that we didn't want to lease and that paying cash is something that only "older" people do. "Like my Mum!!" said one bright sales-spark.

At which point you should have told the rude twunts they'd lost the sale and gone to another dealership.

There will be a bias in that a greater proportion of dealership customers will lease compared to drivers in general, because people leasing tend to get a new car sooner. Also, maybe that's a factor behind dealers so heavily promoting lease deals - it means they can expect repeat custom in 3 years, whereas an outright buyer might not be back for 5 or 10.

[BuggerLumpsAnnoyed]

I've just bought a lease car from skoda. You can walk away at the end without having to pay the final bubble. I don't know if the other dealerships do it though.

DH I don't know about cars. We've had second hand cars that we've ended up spending a fortune on. We've gone for a very basic new car because we don't care about the bells and whistles. We want it to be reliable and we don't want to spend a shitload on money on it. For us it just seemed like the most sensible option

[honeybeetheoneandonly]

I found this thread really interesting. I've only ever bought outright (and secondhand) and never really considered or looked into other options. However, if I combine insurance, tax, MOT and price of car (and based on the assumption I'll be driving it for the next 8-10 years), it basically costs about £120 per month. That hasn't included any repairs or parts or expensive tyre changes, yet.
I can see how it may make sense to actually pay something monthly around that price and not having any worries or extra costs as well as driving a nice car.
I'm hoping to drive my current car for another 10 years but might be looking into leasing deals next time.

[BeALert]

Based on recent experience with cars costing a lot to fix, I'm about to lease a new one.

I've spent an eye-watering amount on repair bills in the last few years.

[wasonthelist]

I've just bought a lease car from skoda. You can walk away at the end without having to pay the final bubble. I don't know if the other dealerships do it though.

That's not a lease, it's a PCP, they are different. There is no final bubble on a lease.

[wasonthelist]

if I combine insurance, tax, MOT and price of car (and based on the assumption I'll be driving it for the next 8-10 years), it basically costs about £120 per month.
If you factor in Insurance, you're not going to be able to lease and insure many cars for £120.

[5rivers7hills]

I've spent an eye-watering amount on repair bills in the last few years.

I spent £1k on my car last year. About to spend another £1k dripped over a few garage visits.

Feeling like I should have got a cheap new car.

[Nettletheelf]

PCP schemes are like paying a mortgage, into perpetuity, on an asset you will never own unless you make the balloon payment at the end. Which an earlier poster informed us that 90% of people don't do, instead preferring to roll the arrangement over into a new car after two years.

Fine if that suits you, but I always found the "I want to know exactly what I'll be paying each month so that I can budget" argument a bit questionable. It's the sort of thing people say when they are persuaded into an expensive fixed rate mortgage when interest rates are falling. Yes, you've got certainty over what you'll be paying but it's unnecessarily expensive.

[Sunshinegirl82]

Again with the suggestion that people who enter into PCP's are all some sort of financially incompetent imbecile.

Several posters have commented that they were forced to incur significant repair costs on cars that they owned outright. What if the budget simply doesn't allow for large payouts? What if you can't afford for your car to be off the road?

For some people, PCP works very well. It is probably not the cheapest possible way to own/run a car but it does have other advantages.

It all depends on the individual.

[tunnelBear]

I'm not hot on the numbers but DH is.

He's shown to me a few times that the lease amount pcm is less than the depreciation on a few cars we've looked at. That's before you take other costs into account.

It's nice to buy things outright but assuming you can afford either option, study the figures and work out which is best in the long term.

[Nettletheelf]

Yes, sunshinegirl, that's why I said "fine if that suits you". Don't let me interrupt your rant, though.

[Firesuit]

He's shown to me a few times that the lease amount pcm is less than the depreciation on a few cars we've looked at. That's before you take other costs into account.

Are you sure that's not because the rest of depreciation is covered by the up-front payment?

i've leased a lovely Astra. £156 PM for 2 years. PCP would have been closer to £300. The car costs £24k to buy, and 2 year olds are going for £18,000. I'm leasing it for significantly less than the depreciation, so i'd be mad to buy it outright

Was the average outlay £156 per month, or was that the actually monthly payment and there was no initial payment? Getting any new hatchback that size for £156 per month would indeed be a very good deal.

I must like the wrong cars, because whenever I look at PCH prices, at best the cost is about the same as depreciation. (I looked at a particular model Golf yesterday, lease price over three years was equivalent to 45

[Sunshinegirl82]

"It's the sort of thing people say when they are persuaded into an expensive fixed rate mortgage when interest rates are falling" I'm not sure how that doesn't suggest that you think someone is being a bit stupid?