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Leasing Car? - CAR ADVICE PLEASE.

PopIcon
PopIcon Posts: 5,970
in Not Sports Related
The fuel pump on my trusty old Ford Focus has stopped working after 17 years of service. Going to cost £700+ to replace, the exhaust pipe fell off last year, the AC is broken and the speedometer randomly drops out from time to time. With all this taken in to account I have decided its time for a new car. I'm not really a car person and want to get something sorted sharpish. I'll be looking at getting a work van next year, so need something to tie me over before then. I have been looking at 12 month leases and wonder if anyone has any experience with these? The other option would be to buy a cheapish car that I would sell on. 

Thanks in advance sports fans.
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Comments

  • hoof_it_up_to_benty
    hoof_it_up_to_benty Posts: 22,472
    What mileage do you do and how often do you drive the car?
  • PopIcon
    PopIcon Posts: 5,970
    hoof_it_up_to_benty said:
    What mileage do you do and how often do you drive the car?
    10k, my missus uses it for work three or four times a week. The car gets used most days for one thing or another.
  • hoof_it_up_to_benty
    hoof_it_up_to_benty Posts: 22,472
    Cheapest leases seem to be for 6k mileage. What size car are you looking for?

  • PopIcon
    PopIcon Posts: 5,970
    hoof_it_up_to_benty said:
    Cheapest leases seem to be for 6k mileage. What size car are you looking for?

    I usually drive up to the isle of Lewis to visit my dad once a year, I'm flying this time so can save 1.5k of mileage. Will be looking at getting a hatchback, nothing too snazzy.
  • hoof_it_up_to_benty
    hoof_it_up_to_benty Posts: 22,472
    PopIcon said:
    hoof_it_up_to_benty said:
    Cheapest leases seem to be for 6k mileage. What size car are you looking for?

    I usually drive up to the isle of Lewis to visit my dad once a year, I'm flying this time so can save 1.5k of mileage. Will be looking at getting a hatchback, nothing too snazzy.
    Was without a car for a bit but given that I do 1500-2000 miles a month the good lease deals were thin on the ground. I rented a van for a bit(£40 per weekend) to tide me over and decided against a lease in the end.

    Managed to rent a car for ten days recently for £150 with unlimited mileage - did over 2000 miles driving up to John O Groats and the Highlands.

    Plenty of deals around but important to make sure they meet your needs.
  • _MrDick
    _MrDick Posts: 13,113
    My other half has got a Citroen C1. Does about 2,000 miles a year at most. Pays £100 a month on a lease with a £3k final payment if she wants to keep it at the end. Does the job ... 
  • hoof_it_up_to_benty
    hoof_it_up_to_benty Posts: 22,472
    _MrDick said:
    My other half has got a Citroen C1. Does about 2,000 miles a year at most. Pays £100 a month on a lease with a £3k final payment if she wants to keep it at the end. Does the job ... 
    Some very good deals about if you only do low mileage.
  • snowinberlin
    snowinberlin Posts: 807
    hoof_it_up_to_benty said:
    _MrDick said:
    My other half has got a Citroen C1. Does about 2,000 miles a year at most. Pays £100 a month on a lease with a £3k final payment if she wants to keep it at the end. Does the job ... 
    Some very good deals about if you only do low mileage.
    Thats the catch, they lure you with attractive monthly prices but based on unrealistic annual milages, as soon as you exceed that the cost escalates !!  If you only do 2,000 miles a year it will be just sitting there unused most of the time, so whats the point paying for a brand new car on the monthly if you hardly use it?
  • Dippenhall
    Dippenhall Posts: 3,920
    When you lease for a year you are effectively paying for:
    1. Depreciation of the vehicle over a year
    2. The interest on the depreciation
    3. The interest on the initial value of the vehicle for a year

    If you buying you are paying for:
    1. Depreciation of the vehicle over a year
    2. Interest on any finance to purchase the car

    Leasing is attractive because it avoids capital outlay and capital repayments so your short term outlay is lower but long-term costs are greater compared to buying on finance.  If using finance to buy, and you want a new car frequently, leasing makes more sense than borrowing because it makes little sense to borrow to acquire an asset that is worth half what you borrowed by time the loan is paid off. Either pay cash or lease and invest the extra outlay you would otherwise be paying on loan repayments. 

    Cheapest option is buying for cash and keeping until too expensive to maintain.

  • bobmunro
    bobmunro Posts: 20,861
    Dippenhall said:
    When you lease for a year you are effectively paying for:
    1. Depreciation of the vehicle over a year
    2. The interest on the depreciation
    3. The interest on the initial value of the vehicle for a year

    If you buying you are paying for:
    1. Depreciation of the vehicle over a year
    2. Interest on any finance to purchase the car

    Leasing is attractive because it avoids capital outlay and capital repayments so your short term outlay is lower but long-term costs are greater compared to buying on finance.  If using finance to buy, and you want a new car frequently, leasing makes more sense than borrowing because it makes little sense to borrow to acquire an asset that is worth half what you borrowed by time the loan is paid off. Either pay cash or lease and invest the extra outlay you would otherwise be paying on loan repayments. 

    Cheapest option is buying for cash and keeping until too expensive to maintain.


    Good advice but I would add that the cheapest option is to by a pre-reg/ex-demo/12 month old car for cash and keeping it until it starts to be expensive to maintain.

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  • ChiAddick
    ChiAddick Posts: 1,781
    _MrDick said:
    My other half has got a Citroen C1. Does about 2,000 miles a year at most. Pays £100 a month on a lease with a £3k final payment if she wants to keep it at the end. Does the job ... 
    Thats not a lease. Thats PCP. 
  • Covered End
    Covered End Posts: 52,034
    bobmunro said:
    Dippenhall said:
    When you lease for a year you are effectively paying for:
    1. Depreciation of the vehicle over a year
    2. The interest on the depreciation
    3. The interest on the initial value of the vehicle for a year

    If you buying you are paying for:
    1. Depreciation of the vehicle over a year
    2. Interest on any finance to purchase the car

    Leasing is attractive because it avoids capital outlay and capital repayments so your short term outlay is lower but long-term costs are greater compared to buying on finance.  If using finance to buy, and you want a new car frequently, leasing makes more sense than borrowing because it makes little sense to borrow to acquire an asset that is worth half what you borrowed by time the loan is paid off. Either pay cash or lease and invest the extra outlay you would otherwise be paying on loan repayments. 

    Cheapest option is buying for cash and keeping until too expensive to maintain.


    Good advice but I would add that the cheapest option is to by a pre-reg/ex-demo/12 month old car for cash and keeping it until it starts to be expensive to maintain.
    Good, I did that today :-)
  • ChiAddick
    ChiAddick Posts: 1,781
    bobmunro said:
    Dippenhall said:
    When you lease for a year you are effectively paying for:
    1. Depreciation of the vehicle over a year
    2. The interest on the depreciation
    3. The interest on the initial value of the vehicle for a year

    If you buying you are paying for:
    1. Depreciation of the vehicle over a year
    2. Interest on any finance to purchase the car

    Leasing is attractive because it avoids capital outlay and capital repayments so your short term outlay is lower but long-term costs are greater compared to buying on finance.  If using finance to buy, and you want a new car frequently, leasing makes more sense than borrowing because it makes little sense to borrow to acquire an asset that is worth half what you borrowed by time the loan is paid off. Either pay cash or lease and invest the extra outlay you would otherwise be paying on loan repayments. 

    Cheapest option is buying for cash and keeping until too expensive to maintain.


    Good advice but I would add that the cheapest option is to by a pre-reg/ex-demo/12 month old car for cash and keeping it until it starts to be expensive to maintain.
    If you happen to have 15-20k laying around yes. Most don't. 
  • charltonkeston
    charltonkeston Posts: 7,371
    ChiAddick said:
    bobmunro said:
    Dippenhall said:
    When you lease for a year you are effectively paying for:
    1. Depreciation of the vehicle over a year
    2. The interest on the depreciation
    3. The interest on the initial value of the vehicle for a year

    If you buying you are paying for:
    1. Depreciation of the vehicle over a year
    2. Interest on any finance to purchase the car

    Leasing is attractive because it avoids capital outlay and capital repayments so your short term outlay is lower but long-term costs are greater compared to buying on finance.  If using finance to buy, and you want a new car frequently, leasing makes more sense than borrowing because it makes little sense to borrow to acquire an asset that is worth half what you borrowed by time the loan is paid off. Either pay cash or lease and invest the extra outlay you would otherwise be paying on loan repayments. 

    Cheapest option is buying for cash and keeping until too expensive to maintain.


    Good advice but I would add that the cheapest option is to by a pre-reg/ex-demo/12 month old car for cash and keeping it until it starts to be expensive to maintain.
    If you happen to have 15-20k laying around yes. Most don't. 
    I did exactly that and yes you are right most people don’t have 20k spare but if you look at the amount of lease cars on the the road, (especially high end German), there isn’t a shortage of people finding the monthly rent money on new cars.
    It all seems a bit of a salesman’s dream to me, “you ain’t got the money, don’t worry. I can get you latest A4 for a price you can afford.”
    Once you start leasing it’s never ending paying out and probably increasing paying out.

     I think Poplcon has the answer in his original post when he mentions a 17 year old car. It might not you want but cut your cloth according to your means.

  • IdleHans
    IdleHans Posts: 10,980
    Buy a 12 year old version of your 17 year old car and you might get 5 more years out of it. And if it breaks, you won't have lost too much.
  • golfaddick
    golfaddick Posts: 33,684
    I like to drive a decent car & dont mind paying £250pm for the privilege. Last 2 have been on 3 years PCP with Jaguar. Usually buy something less than 12 months old & pay extra for servicing & extended warranty. Means the only costs to the monthly payments is fuel & tyres. 

    My 3 years is up in November & looking at my options. Been driving diesels for the past 6 years & would go electric but not convinced yet of the amount & whereabouts of charging points. Hate to get stuck somewhere or have to spend 30 mins in a service station just waiting to get back on the road.

    May look at leasing this time around. Usually do around 10k miles pa. 
  • _MrDick
    _MrDick Posts: 13,113
    ChiAddick said:
    _MrDick said:
    My other half has got a Citroen C1. Does about 2,000 miles a year at most. Pays £100 a month on a lease with a £3k final payment if she wants to keep it at the end. Does the job ... 
    Thats not a lease. Thats PCP. 
    Same difference, is it not? If you don’t want to pay the bubble you hand back the car 
  • Rob7Lee
    Rob7Lee Posts: 9,601
    There can be good lease deals, but generally buying even with a loan is more cost effective if you buy the car initially for a good price, that’s key.

    my wife’s last car before current one; 9 month old A3 s-line. Bought for just under £18k and sold for £15k 33 months later, works out at under £90 a month.

    wifes current car, mini clubman, 4 months old paid £18.5k (was £10k more new) would expect that to cost about £80 a month for 2-3 years.

    Had a 2.5 year old cayenne that I kept for 2 years and got back not much less than I paid.

    @golfaddick likewise electric interests me, but ranges need to improve before I do. Tesla Model 3 or S is getting there.
  • hoof_it_up_to_benty
    hoof_it_up_to_benty Posts: 22,472
    Rob7Lee said:
    There can be good lease deals, but generally buying even with a loan is more cost effective if you buy the car initially for a good price, that’s key.

    my wife’s last car before current one; 9 month old A3 s-line. Bought for just under £18k and sold for £15k 33 months later, works out at under £90 a month.

    wifes current car, mini clubman, 4 months old paid £18.5k (was £10k more new) would expect that to cost about £80 a month for 2-3 years.

    Had a 2.5 year old cayenne that I kept for 2 years and got back not much less than I paid.

    @golfaddick likewise electric interests me, but ranges need to improve before I do. Tesla Model 3 or S is getting there.
    If you have money you're more likely to get a good deal.
  • Rob7Lee
    Rob7Lee Posts: 9,601
    hoof_it_up_to_benty said:
    Rob7Lee said:
    There can be good lease deals, but generally buying even with a loan is more cost effective if you buy the car initially for a good price, that’s key.

    my wife’s last car before current one; 9 month old A3 s-line. Bought for just under £18k and sold for £15k 33 months later, works out at under £90 a month.

    wifes current car, mini clubman, 4 months old paid £18.5k (was £10k more new) would expect that to cost about £80 a month for 2-3 years.

    Had a 2.5 year old cayenne that I kept for 2 years and got back not much less than I paid.

    @golfaddick likewise electric interests me, but ranges need to improve before I do. Tesla Model 3 or S is getting there.
    If you have money you're more likely to get a good deal.
    Yes & no. Dealers often make more from finance than they do on the cars margin, 

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  • ChiAddick
    ChiAddick Posts: 1,781
    _MrDick said:
    ChiAddick said:
    _MrDick said:
    My other half has got a Citroen C1. Does about 2,000 miles a year at most. Pays £100 a month on a lease with a £3k final payment if she wants to keep it at the end. Does the job ... 
    Thats not a lease. Thats PCP. 
    Same difference, is it not? If you don’t want to pay the bubble you hand back the car 
    Pcp you are paying interest on the loan against the car. Unless you get  0%apr of course. Leasing (PCH) there is never any form on balloon payment. You just pay a fixed monthly payment and hand the car back at the end. 
  • ChiAddick
    ChiAddick Posts: 1,781
    Rob7Lee said:
    There can be good lease deals, but generally buying even with a loan is more cost effective if you buy the car initially for a good price, that’s key.

    my wife’s last car before current one; 9 month old A3 s-line. Bought for just under £18k and sold for £15k 33 months later, works out at under £90 a month.

    wifes current car, mini clubman, 4 months old paid £18.5k (was £10k more new) would expect that to cost about £80 a month for 2-3 years.

    Had a 2.5 year old cayenne that I kept for 2 years and got back not much less than I paid.

    @golfaddick likewise electric interests me, but ranges need to improve before I do. Tesla Model 3 or S is getting there.
    I agree that it all depends on the car, the buying price etc. Cash is king with car buying.

    Leasing is most of the time more cost effective than PCP.

    Its horses for courses. 
  • hoof_it_up_to_benty
    hoof_it_up_to_benty Posts: 22,472
    Rob7Lee said:
    hoof_it_up_to_benty said:
    Rob7Lee said:
    There can be good lease deals, but generally buying even with a loan is more cost effective if you buy the car initially for a good price, that’s key.

    my wife’s last car before current one; 9 month old A3 s-line. Bought for just under £18k and sold for £15k 33 months later, works out at under £90 a month.

    wifes current car, mini clubman, 4 months old paid £18.5k (was £10k more new) would expect that to cost about £80 a month for 2-3 years.

    Had a 2.5 year old cayenne that I kept for 2 years and got back not much less than I paid.

    @golfaddick likewise electric interests me, but ranges need to improve before I do. Tesla Model 3 or S is getting there.
    If you have money you're more likely to get a good deal.
    Yes & no. Dealers often make more from finance than they do on the cars margin, 
    If you have access to cash you're more likely to get a better finance deal - some dealers offer very poor deals to those who can't afford to shop around.
  • LargeAddick
    LargeAddick Posts: 32,617
    PCP or leasing, whatever, why not just buy a car?
  • Stu_of_Kunming
    Stu_of_Kunming Posts: 17,120
    LargeAddick said:
    PCP or leasing, whatever, why not just buy a car?
    Apparently people like paying to not own stuff, don't get it myself.
  • SantaClaus
    SantaClaus Posts: 7,669
    Stu_of_Kunming said:
    LargeAddick said:
    PCP or leasing, whatever, why not just buy a car?
    Apparently people like paying to not own stuff, don't get it myself.

    What I don't get is that people with money often drive older, lower status vehicles because they don't care what other people think of them but people up to their eyeballs in debt do the opposite because being perceived as wealthy is the important thing. 
  • golfaddick
    golfaddick Posts: 33,684
    LargeAddick said:
    PCP or leasing, whatever, why not just buy a car?
    Maybe alright for some.....cant just lay my hands on £30k sadly. 
  • stuart_lee
    stuart_lee Posts: 44
    SantaClaus said:

    What I don't get is that people with money often drive older, lower status vehicles because they don't care what other people think of them but people up to their eyeballs in debt do the opposite because being perceived as wealthy is the important thing. 
    This 100%
  • guinnessaddick
    guinnessaddick Posts: 28,700
    golfaddick said:
    LargeAddick said:
    PCP or leasing, whatever, why not just buy a car?
    Maybe alright for some.....cant just lay my hands on £30k sadly. 
    You need a IFA.
  • johnnybev1987
    johnnybev1987 Posts: 11,417

    I wouldn't say this is advice, but I currently have a 3 year lease (expires in March)

    + Short term low costs (£200 per month)

    +Can change car at the end of it


    -Although low costs , my one I cant buy outright which I really regret

    -I have a couple of scratches so ultimately I will need to get these fixed and hope they don't charge me for anything on top

    -Going over the lease allowance, I am very close to this currently have 4500 left (12k per annum) , I work at home now so might just about do it but have to avoid long journeys if possible which is tough eg. I went to blackpool last month with mates and I had to drive which I don't mind but for the mileage instant + 700 miles


    If its a short term fix I would say its good if you can keep it in good condition, eg. no small bumps and you know your mileage and if anything get more than, I know if I go over I am going to be screwed over big time when I have to give it back.

    Pretty annoying I have to give it back and no option to buy as I like it and would have happily paid out the remainder if it was finance or a lease to buy scheme :(

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