Car leasing: a query for the clever people residing in my computer :)

[fairweathercyclist]

Posting for traffic. I need to replace a 12 year old car and the car I am looking at would be around £13K depending on model and level of newness (ie new new or maybe a few months old).

I was talking to someone yesterday who would like me to lease it instead. When I worked out the numbers it would cost around £9000 for 4 years' use. Whereas if I paid £4000 more, it's mine until eg it's 12 years old and I don't have to worry about mileage or the odd scratch here and there.

Anyway my question is - how does leasing stack up financially and why do so many people do it? I think this came up before a few months ago but I can't find the thread now. I am keen to understand the benefits.

I lease. I drive for business so a comfortable car is super important to me. But I'm not too fussed between the likes of Volvo, bmw, Merc, Audi. So when I renew (12-36months) I hunt for the best value for money deal. It means that I get a nice comfy car, it's always in warranty and I'm not paying over the odds. Whilst interest rates are low, it's a leasing market. If they hike back up again then I would consider buying outright as a cash buyer. But I don't like having all my cash invested in a depreciating asset.
For now I've got a large premium estate for under £300pcm for 18 months. Its all about that good deal, I could be paying the same for a 1 series/A class if I didn't hunt the deals.

It's rare to run an old car for 4-5 years and them needing little or no work on them.
I dispute that. It's not as if we are talking 1980s Maestro. Cars are much more reliable these days and that includes cars made 5~10 years ago which is what you S/H market is. It's not as if they suddenly fall apart the moment they are out of warranty!
Touch wood, but we haven't had any major problems or huge repair/service bills. Perhaps DH is just good at picking them.

It's rare to run an old car for 4-5 years and them needing little or no work on them.

No it's not these days. Cars are better built than ever. I have an 11 year old Citroen - all it has needed is it's annual service and then the usual consumables as necessary for the service/MOT, such as the odd new tyre, new spark plugs, new brake pads, etc.

The car before that was a Peugeot that hit 200,000 miles and 10 years old. That needed a bit more, such as a timing belt (again per service schedule), some replacement suspension parts and "boots" whatever they are, and a new exhaust.

I usually buy new and keep for 10 years or so. Never, in 40 years of driving, have I needed anything really major/expensive, not even a new clutch or gearbox. I'm pretty sure the biggest bill I've ever had from a garage is around £500. But then again, I don't buy the top of the range full of gadget type cars - just bog standard low/mid range cars from the popular brands.

The last car I bought was three years old. In the 2.5 years I owned it, it needed a new gearbox and the fuel line fractured, leaving a full tank of petrol on the road. It cost literally thousands on top of the purchase price. Never have I been so pleased to see the back of a car, it persuaded me that leasing a new car and handing it back after three years is the way to go.

its an old hat view to say finance and leasing is always going to be more expensive. The market has changed utterly in the last 5 years or so.

We lease.

It allows us a hybrid, cheap to run cheap to insure and no maintenance costs. Its our second lease car. When handing back to old one was petrified re costs etc but we took car to a body shop and had two dings done and polished out on rest, plus a big scrape on one door. Total cost around 750. I was thinking it would be nearer 1500 and was pleasantly suprised. When they did the inspection they photo any issues and get immediate feedback as to any charges - we had one mark that had been missed (Always check your cills and where seatbelt can mark inside door) charge 40 quid and they have never sent us the bill yet and it was 6 plus months ago.

I am driving a brand new car and I take no hit on depreciation, paying less than 250 a mth and petrol is around 60 quid a month. I have it on 10k a year (My only bug bear is having to say how much you will use it). Ifs fully warranted for 7 years on mine and no issues at all so far

Barbara - its worked for us. Even allowing an extra 1k for something "big" its still a lot cheaper than the extra thousands spent on leasing.

I dont doubt its more convenient, nice not to have any surprise bills,newer car etc But its definitely not the cheapest way to do it!

3 years ago we got a 3+23 month deal on a Passat Alltrack with leather, fancy gears, etc for £119.99 per month, plus £180 admin fee.
So £3,300 for 2 years. And the car was over £30,000 to buy.

That's because you were happy to have an car that just wasn't popular. Those are often the best deals on leasing. leasing is best when you aren't too fussy, and you don't want a particular model. But just a 2 seater convertible, or a 5 dr hatch. Then you can get a great deal on a model that's been a flop, where the manufacturer has offloaded stock the dealers don't want to the lease companies at a massive discount. The lease co bought hundreds of them cheap, so can pass them on cheap.

I don't think I've ever seen a Passat Alltrack on the road. No one wanted them. They preferred the Audi Allroad.

I am driving a brand new car and I take no hit on depreciation, paying less than 250 a mth

Yes, if you want a brand new car all the time, then leasing is cheaper than buying new every 3 years.

But a lot, if not most, people, don't need that, so leasing isn't cheaper if you're happy with keeping cars longer.

You're paying £3,000 per year, so £30,000 over 10 years. I spend about £15,000 over the same 10 years by buying new and keeping it, just paying for servicing and consumables.

For me, paying double just to have a brand new car every few years isn't worth it. Buy then again, I don't waste money on handbags, shoes or designer clothes etc. It's horses for courses.

Nice judgement that wanting a decent car is wasting money. After a lifetime of driving shit cars, I decided that I deserved something decent and the last one I owned was a money pit that caused massive inconvenience when it was off the road.

Anyone who runs old cars and never experiences problems is extremely lucky.

Horses for courses...I'd say a RR is pretty popular. And it's 100% cheaper for me to lease for 3 years than buy one.

100% cheaper would mean that it was free

I keep seeing people mentioning RR. Rolls Royces?

Remember you can lease and then immediately buy out, if you negotiate well this can get a much lower price than paying cash as the seller will often subsidise the price based on the kickbacks they expect to get from the finance company.

I keep seeing people mentioning RR. Rolls Royces?

Range Rovers would be my guess.

You're paying £3,000 per year, so £30,000 over 10 years. I spend about £15,000 over the same 10 years by buying new and keeping it, just paying for servicing and consumables.

But her £30K is fixed. Your £15K isn't. If you had a run of bad luck, with a few major repairs and then writing off the car you'd just paid to fix, and having to start again, it could cost you £40K

Well I'm not sure about the financial side of things but when I was in the market for a new car earlier this year, I looked into leasing or PCP but in the end I didn't want the responsibility of it being someone else's vehicle at the end of the day. I just wasn't comfortable with it. Probably irrational, but that's the way it is.

I had a budget for a used car - maybe a year or two old - and then found out that some companies are [still] doing scrappage deals. Fortunately, this included the company I was looking to buy from. It meant my 17 year car which was worth buttons was suddenly worth £2000 which meant I could afford a brand new car. I paid cash. No wonder the salesman never returns my calls - I bet he hates me!

It's not worth leasing a car of that value. A good leasing deal sees you only paying like 25% of the overall value. You could probably lease a better car for that amount.

Also - we run older cars and sometimes have problems but its never £15 worth of problems or we'd replace the car! Its just a different way of looking at it.

Of course if people want new things and have the money they can have them! Its choices isnt it.

But its silly for people to kid themselves leasing is the cheapest fullstop. It may well be cheapest for what they want (newer car/no hastle etc.) But its not the cheapest option. Of course that's fine! We all have areas of our life where we spend more and where we want to spend less...!

@Lifecraft the phrase 'no shit, Sherlock' springs to mind

We only got the Passat for tip runs, trailer pulling, running DD around for the horses, etc. DH and I both had other cars at the time which weren't ideal for those jobs.

I really don't think the Passat was a slow seller due to people preferring the Audi. You can't really directly compare the Alltrack to an Allroad - we bought one of those when the Passat went back - given the vast disparity in purchase costs (A4 being circa 40% more expensive at the time).

We lease our car. We've had it just over 12 months now. We currently pay the same on it as we did on our previous 10 plate car on finance. Bonus is it's one payment which also covers the tax, and there are no out of the blue maintenance bills as it's still in warranty. Also no MOT. We just have to service it once a year, which luckily doesn't cost much as DH works for the main dealer it came from. It works for us. We looked at the same car on finance, and would be paying the same amount on a 15 plate used, plus having to pay the tax, MoT costs and maintenance.

We always bought ours, until DH spent nearly £30k on a VW Golf GTI from new - it was around 6 months out of warranty and the turbo went, causing major engine damage. It cost around £5000 to get it back on the road again, and that was with a very decent local car mechanic sourcing the parts from Ebay and breaker yards.... the VW dealers had quoted around £8k.

We now lease, and replace every 3 years. All it costs is one service during the 3 years as most are now 20k miles, and tyres. We've got a Range Rover and a Mini Cooper S - DH runs his through his business which massively helps keep the cost down and my Mini costs us £200 a month. You also use considerably less fuel in a newer car.

We chose the models/spec we wanted, then found the best prices online and went to the local dealers - both of whom price matched.

So I suppose it depends whether you want a new car or not?

E.g @PeoniesarePink pays (£200 a month for 36months) £7200 every 3 Years.

Or you could buy a second hand car for that much and run it for as long as it lasts.

Of course you can get as good deal on a new car paying cash as opposed to finance

Simply walk into a showroom, take whatever beneficial finance deal you can negotiate from the salesman, wait until the car is on the drive, then ring up the finance company and pay the loan off in full there and then.

Exactly @LittleLongDog

You have to compare new with new. If you're comparing a 5 year-old secondhand car with a brand new one, the secondhand one will (almost) always be cheaper per month.

But if you buy a new car every few years, it might well be cheaper to lease in the long run.

Always makes me smile wryly when people say they could buy a car and run it for 10 years for less than 3 x 3yr leases. Of course you could, but at year 7 you'll be running a 7 yr old car and the leaser will be in a brand new one again.

Horses for courses, and any other idiom that fits...

No point if it’s 0% @Viciousrooster.

lemonpie which dealership or company do you use please?