I think it depends on whether you’re interested in best value car ownership of a car, or if that’s not really your concern. This is also connected with whether you have upfront cash to spend or are reliant on finance.
Ultimately, buying a car outright is cheaper, in a £ per month way of measuring it. That’s the key issue for some people, but not for others and lots don’t have the upfront cash to access this cheapest option anyway.
The idea a car has to be brand new to be reliable isn’t accurate. Yes of course, old bangers aren’t so reliable, but a 2 or 3 year car which comes with a warranty as good as a new car. An he a very reliable car and very cheap when worked out over month compared to leasing or replacing a car on finance regularly. If you’re happy to drive it for 3-4 years or even longer you can save a huge amount.
The thing with leasing, is it’s a never ending stream of outgoings. Generally people are okay with that because the monthly amount is affordable….but that’s not the same as most economical. Over 5 or 10 or 15 years you’d pay more than if buying outright (assuming you’re not talking real luxury car) but people often don’t make that comparison. If they do, it can feel a bit depressing, and especially if the more economical approach isn’t available to you, because you simply don’t have any upfront cash to buy a car with. The loan if at a good interest rate, and if you’re prepared to keep your car a bit longer will certainly work out cheaper….you will have ‘free’ months after you have repaid all of it. The lease will never end and there will never be ‘free’ motoring.
So I’d look too at the impact behind simply the monthly car payments and how affordable they are on a monthly basis. If you haven’t already bought a house and want to, will having monthly payments like this either impact your ability to get a mortgage, or more importantly, ability to save a deposit, because a couple of hundred goes every month on the car?
The majority if new cars are sold on finance or leasing deals now. Increasingly people haven’t got the cash upfront to buy a car and that’s partly because it’s becoming less of our culture to save up for a car. Who are the big winners? It’s the car manufacturers and dealers. They have a permanent supply of customers who will take brand new cars and have another every 2 or 3 years….and pay more than the purchase price because of the way they buy or lease them.
Yes, the customers get a lovely new car. And I understand how lovely a brand new car is. It’s fab in so many ways. But the reality, is that most people can’t genuinely afford a brand new car every couple of years. What they can afford is a 2nd hand car replaced every few years. and such a car doesn’t have to be a heap or rubbish or unreliable. So by going for the alternative that isn’t really affordable to them, they pay through the nose for it…it’s not blindingly obvious because it’s a drip drip of money month after month after month. But they are paying it none the less.
I think the thing that’s really hard is shifting from finance or lease I g to outright buying. Building up that chunk of upfront money is hard when you’re paying out every month. It’s similar to the difficulty people have in saving a deposit when renting in expensive areas. It can be done, even if it’s not immediate. Using a loan to buy a car and paying it off, then living with that car ‘free’ for perhaps 3 years can allow someone to save the money to buy their next car outright and access much cheaper motoring and then the ability to use 5eir money for housing or childcare or all the other things they might rather spend their cash on. But it takes time and isn’t a quick fix if you’re already deep into leasing etc.
Probably most people on this thread aren’t interested in what I’m saying, because the love of new cars and sense that a new car is somehow something everyone’s entitled to, and buying. 2 year old car to drive for the next 6, is somehow selling themselves short. And also, most people aren’t interested in ideas which might not be accessible now, but need some work. And ultimately, most people are prepared to pay far more over time, so they can have something now and don’t have to wait. And of course that’s fair enough as a choice. It’s not the only option though.