Is leasing better than buying
Discussion
New job means more miles and would like to save a few quid on fuel by switching to electric. Ive always bought my cars with a personal loan and savings and all cars deprecated but seems ev's are a lot more which is making me consider leasing this time.
I currently have an X3 which is worth £28k trade in,
So is leasing a better financial move? And save money?
I currently have an X3 which is worth £28k trade in,
So is leasing a better financial move? And save money?
I'd say it very much depends on the car and the deals you can get on them.
I'm picking up a Tesla in a couple of weeks and that's PCH because on that particular car I think the finance offer is too good to ignore and given some of the ruinous depreciation you see on some EVs I quite like the idea of knowing what you'll pay and letting someone else take all the risk on the residuals.
So I think I'd approach it once you know the car you're looking at.
I'm picking up a Tesla in a couple of weeks and that's PCH because on that particular car I think the finance offer is too good to ignore and given some of the ruinous depreciation you see on some EVs I quite like the idea of knowing what you'll pay and letting someone else take all the risk on the residuals.
So I think I'd approach it once you know the car you're looking at.
[quote=Panamax]Depends how long you keep your cars. Buying new and keeping for a long time always works out much cheaper, but if you feel the need for a new car every three years the balance may be different.[/quote
Would really appreciate if you could elaborate on it “always works out cheaper”.
Reason I ask is, for my next car I am also for the first time thinking of getting new, and as I do 5k miles, and would keep it for 10years or so, the sole reason going for new is for once would like to get the spec which I want, as buying used nearly new, one always have to make compromises, unless you get really lucky.
Would really appreciate if you could elaborate on it “always works out cheaper”.
Reason I ask is, for my next car I am also for the first time thinking of getting new, and as I do 5k miles, and would keep it for 10years or so, the sole reason going for new is for once would like to get the spec which I want, as buying used nearly new, one always have to make compromises, unless you get really lucky.
Panamax said:
Depends how long you keep your cars. Buying new and keeping for a long time always works out much cheaper, but if you feel the need for a new car every three years the balance may be different.
Benz17 said:
Would really appreciate if you could elaborate on it always works out cheaper.
Example: I'm about to sell a Mercedes A-class bought by a family member in 2007. Cost in 2007 was £10,000 for "nearly new" (9 months) car from main dealer.Cost of maintenance has been £8,000
Total (in round numbers) £18,000 for 18 years and 100,000 miles of motoring.
£1,000 a year
£85 a month
In summary, what makes motoring expensive is if you keep suffering (or paying for through leasing) the first three years of depreciation over and over again.
chriz1 said:
cliffords said:
Leasing and paying for 3 years as an example, is the most expensive way to use a car .
Pay a high interest rate and all of the front end deprecation. Plus costs ,fees and funders profit.
It's a mad drug used by many who are hooked.
Why is it so popular though ? Pay a high interest rate and all of the front end deprecation. Plus costs ,fees and funders profit.
It's a mad drug used by many who are hooked.
As I said it's a habit forming drug that makes no financial sense. I don't lease personally and worked in a vehicle leasing company for about 10 years . I made quite a lot of money however.
Just to be clear I am not being judgemental or critical of anyone who leases cars or bikes .
Just contributing to the question.
It cam work out way cheaper than buying one, especially if the model depreciates more heavily than they expected.
For example, I got one of the Honda eNy1 deals in 2024 at £210 p.m. for 3 yrs. 6k miles per year allowance, on a £44k car, although the RRP is meaningless really. The GFV at 3 yrs is £26k, it'll be going back! 2 year old ones are under £20k.
Total cost will be under £8k, it came with free servicing, and the first 2 yrs were VED at £0. Even if you could get one cash at huge discount, say £25k, you'd been worse off buying when trying to sell at 3 yrs old, and the money earns interest at over 4% too, not spending it.
It's not my only car so I'm not hooked on the merry-go-round, as I expect many do become, which is what the dealers want.
For example, I got one of the Honda eNy1 deals in 2024 at £210 p.m. for 3 yrs. 6k miles per year allowance, on a £44k car, although the RRP is meaningless really. The GFV at 3 yrs is £26k, it'll be going back! 2 year old ones are under £20k.
Total cost will be under £8k, it came with free servicing, and the first 2 yrs were VED at £0. Even if you could get one cash at huge discount, say £25k, you'd been worse off buying when trying to sell at 3 yrs old, and the money earns interest at over 4% too, not spending it.
It's not my only car so I'm not hooked on the merry-go-round, as I expect many do become, which is what the dealers want.
In France, its actually pretty hard to work out the age of a car - you'd need to do a parts lookup or something off the chassis number etc. UK is the only country that shows the age of the car on the number plate.
Also, lease firms "double dip" - not only do they incorporate the depreciation into the lease price, they also punish you at the end of the lease for wear and tear over a certain amount which people think is set by the BVRLA but isn't. Treat the car like your first born and you'll be okay, use it as a normal car and you'll be having an argument with them at the end of the contract.
Also, lease firms "double dip" - not only do they incorporate the depreciation into the lease price, they also punish you at the end of the lease for wear and tear over a certain amount which people think is set by the BVRLA but isn't. Treat the car like your first born and you'll be okay, use it as a normal car and you'll be having an argument with them at the end of the contract.
chriz1 said:
New job means more miles and would like to save a few quid on fuel by switching to electric. Ive always bought my cars with a personal loan and savings and all cars deprecated but seems ev's are a lot more which is making me consider leasing this time.
I currently have an X3 which is worth £28k trade in,
So is leasing a better financial move? And save money?
How many more miles? Don't be misled by 5K/yr headline lease prices if you're going to be doing 20K/yr.I currently have an X3 which is worth £28k trade in,
So is leasing a better financial move? And save money?
We bought a new EV through a broker for £35K (it was £45K list). It'll do 20Kyr and lease was looking like £600/mth. So that's £35K for 5yrs. Car has a 100K/5yr warranty so I've reckoned if it's worthless at 5yrs I'll have broken even. Any value in it will be upside.
I did look at leasing and went for a few deals but they always fell apart for one reason or another. The other thing that bothers me is you're stuck with the timescale - if circumstances change you can be stuck with the car and also the change point is out of your hands so you're under pressure to sort a new deal out when the timing might not be ideal.
I think it used to work out when interest rates were very low, and you could get spectacular deals. That’s not the case currently however,and you’ll be paying a middleman a cut that you can remove entirely if buying directly.
ETA; there’s a guy earlier on this thread who quite literally says he worked in leasing but would never lease a car. Possibly a clue?
ETA; there’s a guy earlier on this thread who quite literally says he worked in leasing but would never lease a car. Possibly a clue?
twynham781 said:
I think it used to work out when interest rates were very low, and you could get spectacular deals. That s not the case currently however,and you ll be paying a middleman a cut that you can remove entirely if buying directly.
ETA; there s a guy earlier on this thread who quite literally says he worked in leasing but would never lease a car. Possibly a clue?
Probably cos his prices were shockingETA; there s a guy earlier on this thread who quite literally says he worked in leasing but would never lease a car. Possibly a clue?
With the right lease deal it should be far cheaper than buying outright and trying to flog it privately or trade in after 2-4 years.
Sometimes a lease can be cheaper than buying a 1-2 year old equivalent car too.
This thread will go the same way they all do, comparing owning a 15 year old car bought for buttons that miraculously has no issues for 5 years vs leasing a new car.
Some buyers just want new cars. You can take a punt on tying up your cash and buying a £50k car and being able to sell it for £40k in 2 years time, or you can fix the cost by paying £400 a month. Given you'd pay most of that £10k in VAT purchasing outright, you can see why leasing is popular.
I wouldn't want to be buying a new diesel outright right now, or even an electric given how quickly the tech is moving on and how China is interfering in the market.
Some buyers just want new cars. You can take a punt on tying up your cash and buying a £50k car and being able to sell it for £40k in 2 years time, or you can fix the cost by paying £400 a month. Given you'd pay most of that £10k in VAT purchasing outright, you can see why leasing is popular.
I wouldn't want to be buying a new diesel outright right now, or even an electric given how quickly the tech is moving on and how China is interfering in the market.
Leasing is great if you chase the deal rather than the car. I've leased all sorts of daily drivers over the last decade because I source the cheapest deals I can, usually on stock cars dealers are looking to shift. I'm confident every one of them have cost no more than a cash purchase would have over the same term. Nice new car every 2 years, no MOT to worry about, full warranty the latest technology and no financial risk - you know your total cost from day one. It's certainly worked well for me, but if there's no decent deals available I would happily go back to buying used cars.
Depends on your own circumstances.
Do you just want to have a new car every 2/3 years?
Do you see a car as just an a to b appliance?
Are you petrified of running a car out of warranty?
How many miles do you do?
What is the car needed for?
How secure is your job?
Salary sacrifice available?
Is long term overall cost important, or just monthly?
Are you an active, successful investor in shares/gold/pensions etc, making 10-20% on any spare cash you have?
There s loads of things. If you can afford it, do what you want, but of course a new car every 2/3 years is generally pretty expensive buying or leasing, with a few rare exceptions.
Usually, keeping a 3/4 year old car you already have, for another 3/4 years, is cheaper than buying/leasing a new one.
Do you just want to have a new car every 2/3 years?
Do you see a car as just an a to b appliance?
Are you petrified of running a car out of warranty?
How many miles do you do?
What is the car needed for?
How secure is your job?
Salary sacrifice available?
Is long term overall cost important, or just monthly?
Are you an active, successful investor in shares/gold/pensions etc, making 10-20% on any spare cash you have?
There s loads of things. If you can afford it, do what you want, but of course a new car every 2/3 years is generally pretty expensive buying or leasing, with a few rare exceptions.
Usually, keeping a 3/4 year old car you already have, for another 3/4 years, is cheaper than buying/leasing a new one.
Edited by ITP on Thursday 10th September 01:02
EV technology is advancing very quickly and within only 2-3 years you can find range on new cars has become significantly higher. Thus older cars are in a way obsolete and residual value has tanked. Lease had been a way to avoid the drop in value.
I think more premium cars nowadays have sufficient range but consideration is still there for most of electric market. On flip side for short journeys/2nd car there are deals to be found in used market.
Not relevant to you OP but my friends who dont want to deal with car maintenance and repairs are leasing. Thus avoid dealing with that part of ownership.
I think more premium cars nowadays have sufficient range but consideration is still there for most of electric market. On flip side for short journeys/2nd car there are deals to be found in used market.
Not relevant to you OP but my friends who dont want to deal with car maintenance and repairs are leasing. Thus avoid dealing with that part of ownership.
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