Leasing vrs buying

bowey

bowey

bowey

Associate
Joined
28 Jul 2009
Posts
812
Location
Norton
Currently debating to get a new car or at least a newish one.. Just wondering if anyone has a lease car as there is a lot of cheap deals around but the fact you have to give it back with nothing to show puts me off where as if I bought one I could simply run it for a few more years or trade it it... Anyone have experience pros and con's of this? Thanks
 
Leasing Pros:

a) It's easy

Leasing Cons

a) it is generally the most expensive way to fund a vehicle
b) You cannot easily get out of the car half way through
c) Options make it very expensive very fast
d) You are charged for damage
e) You are charged for extra mileage so it can develop a 'dont want to put miles on car OMGZZZ' mentality, in which case why bother having a car if you are scared to use it?

Buying Pros:

a) It's almost always the cheapest way
b) You own a car you can sell if needs be whenever you want to or keep for as long as you want
c) You have complete flexibility over the car. New, used, approved used, nearly new, whatever spec you want, no problem
d) Damage it? Your car, your problem, do what you want

Cons:

a) It requires you to have the money, or borrow the money
b) It exposes you to unexpected market shocks, ie bottom drops out of market
c) Sometimes you miss a deal that's only available via a lease

What pushes people away from buy and into lease is generally the fact that many people don't have £20,000 but almost all people have £250 a month. But before you go for the most expensive overall option just because the monthly fee is appealing, look at other sources of finance first.
 
Pretty much what fox said. You'll occasionally get some decent deals on lease but they are few and far between.
 
Worth mentioning PCP which is often called leasing but isn't. If you can get a decent deal then it can suit some as a middle ground
 
[TW]Fox;28277911 said:
What pushes people away from buy and into lease is generally the fact that many people don't have £20,000 but almost all people have £250 a month. But before you go for the most expensive overall option just because the monthly fee is appealing, look at other sources of finance first.
Click to expand...

Isn't leasing also popular because cash flow is very important once your a big grown up with monthly bills?
 
degen said:
Isn't leasing also popular because cash flow is very important once your a big grown up with monthly bills?
Click to expand...

Only if you're incapable of managing your finances beyond a month in advance...

I imagine it's relatively popular because people care more about using a new car than owning one.
 
degen said:
Isn't leasing also popular because cash flow is very important once your a big grown up with monthly bills?
Click to expand...

Yes - but you can achieve similar things with a PCP, which reduces the cost of the monthly payment by having a large balloon payment at the end.

Essentially there is no one right answer - do the maths and don't assume one method of purchase/ownership/whatever will be the cheapest all the time.

Nobody is managing to buy a Golf R for a lower ownership cost than those who got those amazing lease deals for example. But on the same note most people leasing a regular Focus diesel are probably paying more than they would if they PCP, HP or purchase a discounted Focus diesel from a broker. Every deal is different.

Generally, though, leasing is the highest cost option.
 
Last edited:
Unless you can get a good deal on a lease buying with a bank loan is your best bet although I've noticed people talking about PCP's in other threads and being able to pay them off early, which is also worth looking into as some PCP's have comparable rates to bank loans and you'll benefit from dealer deposit contributions.
 
Lease : no hassle when it comes to moving the car on. You just give it back and pay any excess mileage.
This is one of the biggest advantages for me. I hate advertising cars,; paying for the advert, taking the calls, organising time for 1st and 2nd views etc etc.. It's that or get shafted by a dealer or worse from webuyanycar.com
 
SDK^ said:
Lease : no hassle when it comes to moving the car on. You just give it back and pay any excess mileage.
This is one of the biggest advantages for me. I hate advertising cars,; paying for the advert, taking the calls, organising time for 1st and 2nd views etc etc.. It's that or get shafted by a dealer or worse from webuyanycar.com
Click to expand...

You could just trade it in, or hand it back and walk away as long as you fulfil the terms of the PCP. That is just as hassle free as leasing.
 
SDK^ said:
I hate advertising cars,; paying for the advert, taking the calls, organising time for 1st and 2nd views etc etc.. It's that or get shafted by a dealer or worse from webuyanycar.com
Click to expand...

Might just put you in the same camp as those who buy a new car every 3 years simply because they refuse go through the MOT process......
 
[TW]Fox;28278884 said:
On the subject of those occasional amazing deals...

http://www.simpsonsskoda.co.uk/new-car-offers/octavia-vrs-pch/
Click to expand...

BUT

If you buy the same car through a broker and get one at the very best price you can, will you lose over £6000 on it in the first two years?

£21k on drivethedeal. Cheapest 2 year old tdi vrs on autotrader with 40k miles on the clock and also the old model is up for £14k...

24,000 more miles on that deal is £1728..

It would probably be a close run thing.

This is where, as you have pointed out, you have to work out the actual cost of the lease vs ownership.

Also, leasing is obviously THE most expensive way of owning a car long term if you keep doing it. You are literally paying for the most expensive years in new car depreciation, every 2 or so years. I guess you get a nice new car all the time though :p
 
Last edited:
I couldn't cope with 8000 miles a year. Is that sort of car/engine (does it have a DPF) even suitable for such a low mileage? Well, unless you only do occasional long runs, I guess?
 
[TW]Fox;28277911 said:
Leasing Pros:

a) It's easy
You don't keep any equity in the car
Don't have to deal with dealers, so no playing games with what's my car worth, how much can I get off etc
Costs are known up front

Leasing Cons

a) it is generally the most expensive way to fund a vehicle
b) You cannot easily get out of the car half way through
c) Options make it very expensive very fast
d) You are charged for damage
e) You are charged for extra mileage so it can develop a 'dont want to put miles on car OMGZZZ' mentality, in which case why bother having a car if you are scared to use it?

Buying Pros:

a) It's almost always the cheapest way
b) You own a car you can sell if needs be whenever you want to or keep for as long as you want
c) You have complete flexibility over the car. New, used, approved used, nearly new, whatever spec you want, no problem
d) Damage it? Your car, your problem, do what you want

Cons:

a) It requires you to have the money, or borrow the money
b) It exposes you to unexpected market shocks, ie bottom drops out of market
c) Sometimes you miss a deal that's only available via a lease
Click to expand...

Added a few pros to leasing.



You need to compare like for like, which is PCP and leasing. If you're not picky, there are some good lease deals out there that are cheaper then PCP. If you don't need any options than these make sense. If you want to lease a specific model then PCP is most likely going to be cheaper. If you want to add options, then the price adds up quickly and you don't see any of it back.

Go for what ever one is cheaper.
 
Save up and buy something outright, then you own it, you will be more proud of it and probably take care of it more. Do not buy a brand new car though as they drop in value as soon as you leave the showroom.
 
You must log in or register to reply here.
Back
Top Bottom