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Original poster

Young people are foolish for leading cars?

183 replies

Kitchendrama1 · 08/09/2021 13:19

£2k to get the car and 36 payments of £350 of which you get nothing at the end of 3 years. £14,600 with insurance included, for a car you won’t own for 3 years.

I can understand insurance is high for a young person, but it’s dumb?

OP posts:
Original poster
Kitchendrama1 · 08/09/2021 19:27

@willithappen

Why are you so pressed about what others choose to do with their money? If they want to take a car on finance that's their decision and obviously plenty reason for it!

If you are happy with your car and how you choose to buy it not sure why you are so interested in what others do. How do you even know most of the cars are leased?

They may have plenty income to cover the costs and making regular payments can only help with improving credit rating at the same time, as well as allowing them to manage money and run about in a safe car.

Why are you so pressed about what others write on AIBU?
OP posts:
MoonbeamSprinkles · 08/09/2021 19:30

But it’s the same as anything

Depending on your circumstances and reasons for doing it, it could be a sensible or not sensible thing to do.

As a way to finance a reliable car with payments you can afford then it can be a smart choice.

To buy a cat completely above your means with monthly payments you struggle with not so much.

It would be the same as saying all young people are stupid for having credit cards.
when actually using a credit card can be a sensible thing to do to make big payments online and if you pay it off every month.
But obviously buying things for status that uou can’t afford has never been a good idea.

MoonbeamSprinkles · 08/09/2021 19:37

it's fine to lease a car... until you loose your job and can't pay for it.

You can give the car back and as long as the car is worth more than what’s left on your hire agreement you’re fine. If not pay back the difference.

Obviously not ideal but just the same as having a car loan.

drpaddington · 08/09/2021 19:45

We are considering PCP but the idea scares me a bit!

We got our current car second hand, paid for partly with savings and partly credit card. 5 years later it's now 12 years old and starting to cost us money in repairs- but we don't have enough between savings and credit card limit to buy something else. I really don't want to get something 'old' that will just cause us problems and cost us money. I don't like the idea of being tied in to monthly payments- with the credit card we could choose to pay what we could manage each month. Also I worry that we'd get changed a fee for wear and tear/ damage when we take the car back?!

Original poster
Kitchendrama1 · 08/09/2021 19:50

@MoonbeamSprinkles

it's fine to lease a car... until you loose your job and can't pay for it.

You can give the car back and as long as the car is worth more than what’s left on your hire agreement you’re fine. If not pay back the difference.

Obviously not ideal but just the same as having a car loan.

Penalty for handing back?
OP posts:
MoonbeamSprinkles · 08/09/2021 19:57

Penalty for handing back?

Well that’ll depend on your contract.

BlaiseAnais · 08/09/2021 20:01

It really depends. Your figures seem high but they don't have to be.

I had a car on PCP all servicing including 120per month for three years £4320 over the time we had it. So £1440 per year

We also got a second hand car the same time. Paid £4000 upfront. Have had it for 4 years and has come us £600 per year in MOT and servicing. Currently worth £1000. £1350 per year. I'd much prefer paying an extra £100 per a year for a car that isn't falling apart, has a check engine light always on and is far more comfy.

Our next car will be a PCP.

Royalbloo · 08/09/2021 20:02

Leasing is to cover yourself from the depreciating value of the "thing" you want and to make sure you cap your outgoings. If the car is worth nothing at the end - that's the risk of the lesaser, not you.

Royalbloo · 08/09/2021 20:03

If you hand it back early they they calculate the actual value of the asset and if it has dropped then they can ask you to make up the difference as you're breaking your agreement.

Royalbloo · 08/09/2021 20:03

It's pretty clear, simple and above board...

Royalbloo · 08/09/2021 20:04

Mine has been £200 per month for 4yrs and I'm buying it in Jan for £4K. It's worth a lot more than that because of the low mileage etc but they took that risk, I didnt

Original poster
Kitchendrama1 · 08/09/2021 20:08

@Royalbloo

Mine has been £200 per month for 4yrs and I'm buying it in Jan for £4K. It's worth a lot more than that because of the low mileage etc but they took that risk, I didnt
Did you have a deposit? What’s the car?
OP posts:
Original poster
Kitchendrama1 · 08/09/2021 20:10

@BlaiseAnais

It really depends. Your figures seem high but they don't have to be.

I had a car on PCP all servicing including 120per month for three years £4320 over the time we had it. So £1440 per year

We also got a second hand car the same time. Paid £4000 upfront. Have had it for 4 years and has come us £600 per year in MOT and servicing. Currently worth £1000. £1350 per year. I'd much prefer paying an extra £100 per a year for a car that isn't falling apart, has a check engine light always on and is far more comfy.

Our next car will be a PCP.

It’s someone who’s doing it. £120 per month and a deposit?
OP posts:
tttigress · 08/09/2021 20:11

I know a foolish 50 something that has just done that to get a new BMW, I don't think it is only the young.

The worst part is the limited milage.

Student133 · 08/09/2021 20:12

Hihlgher end cars such as BMWs can be relatively cheaper to lease than buy as they hold their value, thus you pay a relatively low monthly to lease than you would if you owned the car. Also much less hassle as if you wrote it off etc you don't own the car, or at the end of the term you just hand it back. It's all about how much you pay per month to use the car, little point in ownership of a depleting asset anyway.

CorianderBee · 08/09/2021 20:13

@Kitchendrama1 yep, that was it, a shitty Fiat 500 in 2013-16. Gave it back after, didn't go over the mileage, had to pay MOT of course and insurance (2,000 a year).

I couldn't afford a car up front not even a shitty one and I knew I was moving to an area where I wouldn't need a car after. Didn't want it hanging around at a parents or anything while it sold.

It worked perfectly for me. And it improved my credit score :)

Original poster
Kitchendrama1 · 08/09/2021 20:15

[quote CorianderBee]@Kitchendrama1 yep, that was it, a shitty Fiat 500 in 2013-16. Gave it back after, didn't go over the mileage, had to pay MOT of course and insurance (2,000 a year).

I couldn't afford a car up front not even a shitty one and I knew I was moving to an area where I wouldn't need a car after. Didn't want it hanging around at a parents or anything while it sold.

It worked perfectly for me. And it improved my credit score :)[/quote]
£2k a year on insurance? I guess it’s because you were young?

OP posts:
MoonbeamSprinkles · 08/09/2021 20:16

the worst part is the limited milage.

But you can say how many miles you’ll think you’ll do, you can add more mikes if you need to.

NotMyCat · 08/09/2021 20:17

A lot of my work colleagues are young and lease via work. Comes out your pay before tax and you have the car for 6 months and then swap it. Hassle free, warranty, unlikely to break down and cheap for a nice car

willithappen · 08/09/2021 20:27

Lol that was a great comeback OP 😆

CorianderBee · 08/09/2021 20:47

@Kitchendrama1 yes it was my first car and I was 19 at the time :) unfortunately insurance ranged from £1,850 to £3000 depending on the car.

GreenTortoise · 08/09/2021 20:50

You need to remember the wages are absolutely shit now and you can't put by like you used to. Especially on NMW.

£350 a month could be affordable to them if they don't have money for a car upfront of no finical support from their relatives.

Fair play to them. It's one of the first things they will own and if they pay it. Who actually cares.

CorianderBee · 08/09/2021 20:50

But like I said, it worked for me. An affordable monthly amount, no upfront, their risk, easy to get rid of and built credit score and my no claims.

Leasing isn't a shit idea if you do it the right way. And not all young people are wasteful idiots with no eye for their future.

I paid my lease with my tips from my job while at uni. If I lost my job I had a small stockpile from summer work each year. My insurance was in instalments which I paid through my wage (worked 20-26 hrs a week) and if I couldn't afford insurance and lost my job I'd still be able to pay the lease I owed.

FTEngineerM · 08/09/2021 20:52

@PlasticDinosaur

Hands are tied by not having the money upfront. It's another tax on those who don't have thousands in savings 🤷
Someone who’s never actually looked into leasing a car.

The initial payment can be 1/3/6/9 monthly payments.. it doesn’t have to be thousands.

LegallyBronde · 08/09/2021 20:56

I drive on average 30k per year with my job so I lease. I get a generous car allowance, spend every penny of it and drive a lovely brand new car every 3 years. I put far too much mileage on vehicles to make owning one worthwhile. I get a lease and service package and only worry about what to get next time. Its bliss. Call me stupid if you want but it works for me.