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Lease car or buying outright??

5 replies

flightofthesevenmillionbumblebees · 01/07/2022 10:14

Lease car or buying?

Need a bigger car as I've got an aygo which is a great car but tiny and the chassis of my pram takes up the entire boot!

My cars worth about 5.5k according to auto trader but I'm inclined to think I'm likely to get maybe 5k for it. If I buy a car I need one that's no more than 3k as I have an important debt I need to pay off with the difference.

Looking into cars and a friend recommended getting a lease car. What are your experiences? Is it absolutely worth it, or do you think it's better to own your car? Friend said now she's had a lease car she'd never go back to just buying outright. Wondering if it's worth looking into, or whether I should just stick to finding a car to buy..

OP posts:
gingersplodgecat · 01/07/2022 10:23

Leasing a car means that you don't even own it at the end of the term, so I wouldn't. Hire purchase or a loan from your bank would be a better bet.

Soontobe60 · 01/07/2022 10:25

I’ve had cars on both PCP and lease. My current one is leased and I am waiting for my mew one. I think it very much depends on what you are prepared to pay tbh.
I want the reliability of a newish car. I know how much I can afford to pay each month. I know that unless I buy a car that’s over 6 months old and keep it until it dies then I’m probably paying over the odds. But I’m happy to do that.
So I lease and change my car every 3 years.
(BTW my previous car was an Aygo and I changed to a T-Roc which is perfect for transporting my 2 grandchildren round!). Over the 3 years I will have paid out about £10k. If I had bought the car cash from new, I believe it would be worth around 50% of the initial cost after 3 years, so leasing doesn’t seem such a bad option. It would take around 8 years of leasing to see a negative cost comparison.

BettaSplenden · 01/07/2022 10:43

It depends on what your preference is. I've had lease, PCP, a car loan and bought outright.

Lease was good because I had a nice shiny new car that I needed (had to upgrade quickly as my previous car just gave up) it included road tax, services and maintenance but not insurance or tyre punctures ( but did include replacing tyres when the tread wore down) and was well priced. I also automatically got courtesy cars

However when I looked at lease recently the prices were quite a lot higher and that same car (this year's model but lower spec) was now 45 a month more and didn't include the maintenance etc.

Most of the least companies I've dealt with want you to pay for yearly services etc so that's going to add up too if you don't get maintenance.

Due to that I took a loan out for the difference between my savings and the amount needed for my newest car (second hand)

It also depends on your financial position (as you need to sell your car to pay off a 2k debt I'm guessing you don't have a huge amount of savings or extra money at the end of the month). Leasing could be around £300 a month for a half decent car (more if your going for higher spec/ 'better' brand etc)

But if you got a loan for the difference that would be lower.

Or you have PCP as an option if you went for something cheap like a Dacia.

WombatChocolate · 02/07/2022 15:01

Depends if your priority is to be driving a new car all the time or to drive for as cheaply as possible over time.

If you want the latter, buying outright and keeping the car as for a good few years will always be cheaper.

Do any calculations over the long term of perhaps 6 years. Don’t just think about monthly affordability but total cost of motoring.

If you buy outright, as you know from doing it before, you do need to have some money available to spend on serving, basic maintenance and the odd bill. For some people, that’s too scary because they basically live hand to mouth and the thought of a bill for £500 to get the car through servicing and MOT at 5 years old horrified them. What they forget is they’ve spent far more than £500 extra over the years on lease payments compared to buying outright. But it depends on your financial discipline. You can pay monthly…but ultimately you pay more for that.

In my view, it’s worth buying a car that’s 3-5 years old that comes with a decent warranty, and then keeping it for 5-8 years. Sometimes you’ll find you get 10 years out of it perfectly happily.

Some people also seem to think any car more than 2 years old can’t be relied upon. They have been led to believe that only the poor drive older cars and that everyone these days deserves a new car. But the reality is that those new cars aren’t actually affordable to many and although they manage the monthly payment, the impact ontontiehr areas of their life is significant, even if they don’t spot it. It can mean they can’t build up a mortgage deposit, or their oension contributions are low and they need to work an extra 5 years, or they can’t save and end up stuck in a smaller house than they’d like.

Look at your finances in the round. Think about the full costs of the car, but also the consequences of if you choose to go for lease payments about the other impacts if that in your finances, not just now but also in 3 years when the leas ends. Lots of people find they thought they’d just lease for 3 years and then stop, but actually once they’re in these schemes, never build up the savings to buy a car outright again and then are essentially trapped in leasing long term. It’s all worth thinking about.

BooksAndHooks · 02/07/2022 15:15

Also new cars are like hens teeth depending on what you want. We ordered a lease car in October last year. Still not got a build date and looking likely the order will be canceled as they just aren’t building them due to parts. People ordering now are being told 12-18 months wait.

we decided on lease due to having bought a year old car that we have had to spend thousands on over the few years we’ve had it. We bought it as eco etc yet it is now not compliant with ULEZ and going to be very hard to sell it now. The petrol equivalent is £10,000 more than we paid for this car when it was a year old several years ago.

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