leasing vs finance

[Wonko The Sane]

evenin' all

Looking at changing the wife's car, only got £1k to pay to clear finance on it so going to do that tomorrow,

Considering new finance, but not looking to spend as much - car supermarket kind of level instead of main dealer used, but wondering if leasing might be a good idea

Don't really know about leasing, what's the benefit of leasing other than being able to say from one month to the next that you want to change / don't want it?


ta
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[Robby]

I'm leasing a car at the moment. The monthly payments are similar to PCP, but the upfront deposit is tiny - in my case about £600 rather than £3000.

It works out for me. Means I have a brand new hybrid car for £200/month.

[Wonko The Sane]

it's essentially a long term rental from what I've read online and that hire-purchase is an in between as you can choose to own the car?
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[iooi]

[dodsi]

I ordered a car for lease in April last year and it was delivered 1st September last year.

Car in question is a Skoda Superb SE Technology 2.0 tdi 150

For me it was a simple maths problem. I worked out that our previous car (4 year old Honda Civic 2.2 SI) - over 2 years cost more than the costs over 2 years (upfront rental and monthly payments) for the brand new Superb as above... which is a shitload more car for the money.

My costs are just under 7k over 2 years on a maintained lease. Broken down that's £250 ish X 23 and £1000ish upfront.

Everything is included other than Insurance and fuel... any other cost you could ask 'what about x or Y' is included in the above price.

So, the advantages for me are - fixing the costs especially depreciation which on any new or newish car is going to be one of your biggest. You know what you will pay and certainly on a brand new car that is warrentied and maintained you are not getting a surprise bill for consumables or breakdowns.

Disadvantages, you will never 'own' the car or have any equity in it but as a heavily depreciating asset this really is not a concern for me. It's not like renting a house for instance.

Any damage, as with any other new car in reality you are liable for outside of fair wear and tear at the end of the contract which could cost you at the end if you are not careful manoeuvring or other people are not careful in car parks for instance.

Gap insurance is a good idea - we have paid about £100 for the whole rental period, this was way cheaper than the dealer offered us.

It's worth looking at the various leasing deals for the types of car you want because costs can vary hugely between dealer to dealer but more importantly between models. In reality be flexible on which car you may want because there are great deals on certain cars.

If you have any specific questions- ask away.

[Polarbear]

My views on leasing -

You never own it. I hate that. I hate 'renting'.

Once I have paid off my car (or bike) it is mine. No more payments. If I pay a car off in 4 years then I would expect to have many many years of good service before it is junk. With no rental payments. . So for those 10 years or so before it is pronounced dead I am paying no rent while Mr. Leaser might have another new car, and another in that time, he is paying rent. I don't need a new car every 3 years.

I can bugger around with it to my hearts content. It is mine so if I want to tune or modify it I can. I won't get hit with a whopping bill because Mrs. Gumby planted her Tesco trolley into the door and I hadn't got it fixed or I've racked up to much mileage.

I'm sure Dodsi is right and it's financially wonderful if you look at it a certain way, but it isn't for me.
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[Derivative]

Think I'm halfway between Polarbear and Dodsi on this. Just depends what you actually want from cars.

The entire point of leasing is to drive new cars forever (potentially switching about the models).

It's not really about the financial stuff. It's more just less hassle than buying a new car and selling it after 3 years over and over.

If I were in the financial bracket I could see myself leasing new luxury cars where the features change quickly enough that a 3 year old car is way behind. e.g. I don't think I'd buy a brand new S Class or a Tesla or something like that cash even if I had it because in 5 years I wouldn't want to drive it anymore. Far easier to give the keys back a few years in and get the new one.

In terms of leasing low/mid range cars I think the whole thing is mental, but that's probably because I don't understand the mindset that goes into buying them at all, I'd far rather buy a 3-5 year old prius/mondeo/civic/whatever else shit boring family car and spend the difference on renting luxury cars for the days when I feel like being a flash bastard.

I may well have missed the point entirely though. I don't understand why you would finance a depreciating asset unless the interest rate is 2% or something.

[stevo as b4]

There's a garage in Droitwich that Andy scooter knows, and there is one car inside that I'd love to own. You couldn't lease one if you tried though and it couldn't possibly depreciate if you kept it clean and didn't wreak it either.

Unfortunately it's not for OP or his/wife's needs. I hope he just avoids Kia's and any car this time that has any slim chance of being unreliable or having a single fault occur too. As I remember last time how much it screws up his wife's work transportation requirements if it did.

[Derivative]

I mean, if you want reliability, I'd have an old (15+ years) petrol car sitting there to use if the main one goes.

The depreciation from year 0 to year 1 on basically any new car could buy 10 bangers if you have the room to store them.

[dodsi]

I must also explain that I also heavily believe in bangernomics too. My wife uses the skoda as her daily drive (40ish mile round trip) and on a massive, comfortable car with umbrellas inside the front doors, leather interior and radar cruise control gets over 50mpg in unfavourable conditions and on our semi frequent Sussex to Yorkshire runs @ '70mph' on the motorway we get over 60mpg.

This is a significant fuel saving over the 17 year old BMW 325i that I drive mainly on my 6/7 mile commute. I have this car for all the reasons that leasing a car is a bad idea... damage, depreciation... ongoing payments... owning it etc etc

So if we go shopping - we take the zim zimmer and park it wherever we like without worrying someone does prang it with a car, a door or a trolley and the skoda stays at home. If I want to go somewhere and park the car on the street all night or something I can use the old zimmer.

So in short, the leasing is both a great and terrible idea depending on your use for a car.

[P.]

I really like driving older shit cars. A new car would be lovely, but driving other peoples expensive (or just new models) makes me cringe. I don't mind diving into the bush to avoid a truck in a country lane, however I couldn't face chucking 15k into a hedge.

£200 55mpg diesel hatchback that just goes and goes. Its on 132k, just had its first clutch change and 4 tyres, 400 quid all in and will continue running until the engine goes pop.

[M.C]

[dodsi]

There is a real president on here for owning shit old cars that cost peanuts to buy and apparently little to run. The status quo also on here generally dislike and disapprove any kind of finance on a vehicle or leasing (which I suppose is technically a finance product)

This all depends on your personal circumstances and preferences.

The thing with a lease is that you cannot chop it in part way through your agreement - you sign up for a term and the car you order is effectively yours for that period. In my case 2 years - you can get longer. ALWAYS DO THE MATHS not all deals are good. Sometimes extending the lease to a longer term can actually cost you more money.

Take into account all costs associated with running a car and your annual mileage. If my wife was not doing the commute she does it would not be worth our while having the lease. We would just have 1 or 2 cheaper 'bangernomics' cars and not go to the expense of a lease. But expecting the mileage of a banger we expect of the lease would run up many more costs in servicing and faults/maintenance and open up the risk of breakdowns that could also be costly.

[Wonko The Sane]

[P.]

[M.C]

[P.]

[JP7]

I spent £295 a month on a BMW 435d M Sport Gran Coupe for 18 months, which cost me a total of £5310. The list price of that car was £47k, after 18 months it was worth less than £30k with 12k miles. I had the option to buy it for £32k but that was far too much so I handed it back. It's currently for sale at a Motorpoint centre for £27500. So I spent just over £5k on a top-of-the-range car that lost £20k. And I never had to buy tyres or service it.

I've now got a Seat Leon Cupra leased for £299 a month, whereas I couldn't finance it for less than £400 a month on PCP.

Leasing makes sense if you want to drive something that's likely to depreciate, because you're not risking much of your own cash. All you can do is look at all the figures for each option, and the right one will stand out.

[stevo as b4]

I'd lease something like a Pug 107 or similar city car if it was a simple set of wheels to do a job of A-B just to earn a living.

Otherwise I don't get how or why people would and want to lease a BMW 435sport coupe, when it's just used for the same thing.

Built not bought is where it's at for anything other than essential daily transport.

Instead of a BMW 435 sports coupe, I'd rather have an old 635csi with a supercharged M5 engine fitted and a full roll cage, but I do understand that there are some people that want to drive new latest thing cars because they see them as a status symbol or sign of their success in business or life. The only thing I don't understand is why?

I can't see anything better about a new Audi S5 than a V8 Ford Capri, but I'm happy to listen or be enlightened if I'm wrong?

[nowhere.elysium]

Leasing low end stuff is madness.
I tend to take the stance that finance is handy for the lower end of the market, and leasing is a decent option for the higher end.

Doesn't mean that I'll make use of it though: my current car was 750 quid, and I'm sure it's got another 100k left in it, minimum.
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[dodsi]

What are we all considering 'low' 'mid' and 'high' end?

Surely instead of using arbitrary thought patterns conforming to the status quo that have no further evidence than 'that's what I think and therefore it must be true'.

How about we think about it as a simple maths problem - because that's all it is.

In my case, it was cheaper to lease a brand new exec car for 2 years than to buy and run a 4 year old second hand mid range family hatchback. This was calculated on a total cost over the same period, depreciation, service, MOT, consumables, breakdown cover etc.

There was nothing wrong with the Honda Civic but by comparison to the superb it's basic and small and uncomfortable.

Before the Civic my now wife had a Citroen C1 (which as we all know is a 107/aygo) and around town it was great but you can't fit very much in it let alone 4 adults and luggage. Then it's flighty, underpowered and noisy so awful on the motorway. Good transport? Not really.

The Civic had firm suspension and low profile tyres - big step up from the c1 in terms of power, noise and comfort but you felt every bump and there were few drivers aids.

The superb by comparison Is many classes above both. Loads more gadgets and way more spacious and comfortable - more comfortable and quiet than my e46 3 series.

So cheaper and better than previous car? No brainer for me.

Plus it's nice to drive a decent car - shitbox's have their place but after a 300 mile drive in the superb you feel like you have driven 50 miles. stick the radar cruise on and it slows and accelerates for you as required - literally just steer the thing from the comfort of your big comfy seat. All whilst getting over 60mpg... paid my money and took my choice.

[P.]

[M.C]

I'd lease with one of those just add fuel deals (as insurance's still rapey for me), although you normally need a couple years NCD (they accept bike right? ) so you'd have to work out the savings. Also they're normally horrid base models with pathetic engines.

Normal leasing I don't understand, 5k buys you so much in the car world that's not going to be worth nothing when you come to sell it. It makes sense for fleet vehicles where depreciation's an issue, but for an individual you're throwing money away IMO.

[dodsi]

[iooi]