Leasing/Finance

lookitsjonno · 11 Aug 2013 at 23:21

Heres my problem...

I want a new car, I can't afford to pay cash, but I can easily afford the monthly payments through either personal lease hire or finance. The problem is I have always paid cash for cars, and finance/leases feel almost dirty to me.

Maybe it's just me? Do you lease/finance a car, do you regret it, or would you do it again?

daz · 12 Aug 2013 at 07:56

Buying brand new - whether leasing or through cash or some other finance method you are going to pay extra for the privilege.

What's your budget and what are you looking for in a car? (What do you use your car for?)

Russinating · 12 Aug 2013 at 08:29

We've just bought a new car and we were looking at Zopa originally. Pretty low rate - 4.8% - certainly as low as most dealers will offer, with the added benefit that you'll own the car straight away and won't have to save on the side for the balloon payment.

In the end, inspired by Zopa, we thought why pay random people 4.8% interest when we could pay our family members that. I know you may not be in the same position but 4 of our family members have each put in a few thousand and we'll pay them back instead. Worth thinking about - even your long lost rich god father might be interested in 4.8%. savings.

PMKeates · 12 Aug 2013 at 08:52

Finance isn't 'dirty' if the rate is good and the deal sensible. That said, reconsider if you are getting a new car because you want a 'new car'; paying out hundreds per month that you will never see again to buy a brand new Corsa, when an older model is just as good, seems a chronic waste.

The key financial element to buying a car is Total Cost of Ownership - make sure you consider not just the monthly payment, but the cost of finance, the residual value, servicing, fuel etc. for the chosen model. New car TCO, even on the best deals, is typically horrific.

acemastr · 12 Aug 2013 at 08:54

Russinating said:
We've just bought a new car and we were looking at Zopa originally. Pretty low rate - 4.8% - certainly as low as most dealers will offer, with the added benefit that you'll own the car straight away and won't have to save on the side for the balloon payment.

In the end, inspired by Zopa, we thought why pay random people 4.8% interest when we could pay our family members that. I know you may not be in the same position but 4 of our family members have each put in a few thousand and we'll pay them back instead. Worth thinking about - even your long lost rich god father might be interested in 4.8%. savings.

I'd sooner pay a random company, money + family = trouble.

Russinating · 12 Aug 2013 at 08:59

Only if you fail to pay.

PMKeates · 12 Aug 2013 at 09:15

Russinating said:
Only if you fail to pay.

Exactly. If you don't see what you owe your family as a joke, then there's no problems. Though, it of course depends on what kind of relationship you have with your family.

DanTheMan · 12 Aug 2013 at 09:44

People often overlook getting finance on a nearly new or used car too. We bought our last car at 3 years old on finance and 'only' pay £160 per month for 3 years, at the end we don't need to give it back and restart the cycle. If you can afford finance on a new car for ~£400per month, why not save yourself £200 per month and get a 2 year old car that will feel just as special for much, much less?

PMKeates · 12 Aug 2013 at 09:49

DanTheMan said:
People often overlook getting finance on a nearly new or used car too. We bought our last car at 3 years old on finance and 'only' pay £160 per month for 3 years, at the end we don't need to give it back and restart the cycle. If you can afford finance on a new car for ~£400per month, why not save yourself £200 per month and get a 2 year old car that will feel just as special for much, much less?

Congratulations Sir, you have won Motors!

booyaka · 12 Aug 2013 at 11:12

why not finance. I've just bought a car on 0% finance!

thewanted · 12 Aug 2013 at 11:14

booyaka said:
why not finance. I've just bought a car on 0% finance!

And probably paid full list price for it in the process

mikeh501 · 12 Aug 2013 at 11:18

thewanted said:
And probably paid full list price for it in the process

and likely had to pay 50% deposit...

booyaka · 12 Aug 2013 at 11:20

thewanted said:
And probably paid full list price for it in the process

no

mikeh501 said:
and likely had to pay 50% deposit...

and no

Kenai · 12 Aug 2013 at 11:21

booyaka said:
no

and no

very informative, would read again

booyaka · 12 Aug 2013 at 11:29

Kenai said:
very informative, would read again

anytime

£2k deposit and £295 a month, got about 5% off list price as the 0% finance offer is cutting the margins the dealer gets so you won't get much more, if anything over that.

Also 3 years free servicing, free GAP insurance as well as mat's chucked in.

Of course paying cash without the financing you can get around 10-12% off the list price.

Theophany · 12 Aug 2013 at 11:35

DanTheMan said:
People often overlook getting finance on a nearly new or used car too. We bought our last car at 3 years old on finance and 'only' pay £160 per month for 3 years, at the end we don't need to give it back and restart the cycle. If you can afford finance on a new car for ~£400per month, why not save yourself £200 per month and get a 2 year old car that will feel just as special for much, much less?

I concur. Provided you're not getting turned over on the finance, it is a genuinely good deal on the car and you've done your sums properly, I'd argue it makes more sense to go down the finance route instead of piling a big chunk of change into a depreciating asset.

All based on personal circumstances though.