Leasing vrs buying
- Thread starter bowey
- Start date
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[TW]Fox;28284252 said:
What?
All the leases I have been interested in have actually been far cheaper.
For example to get a 208Gti on PCP:
£2000 Deposit - £304Pm 25 months. + £9600 over 25 months
Same 208Gti on a lease:
1-17 term £201Pm = £3618 over 18 months. If you wanted to then lease a new one again at the same costs its £5025 for 25 months.
Both based on a 10K PA limit.
I know which i would pick
That is a misunderstanding of how a PCP works. You are borrowing the whole value of the car. So the bigger deposit you put down, the less interest you pay overall. You are simply offsetting the future value of the car based on the future value, but you are still paying interest on this amount.
So when you put more in at the start, you are paying less interest, not more.
Of course, what you are losing out on is any potential interest any equity in the car may have made if invested. But with such terrible interest rates going around, it probably doesn't make much difference just now.
But that is a special case. There are a few of them going around, where the lease is much cheaper. Same as the Golf R leases and M135i leases of recent. Most of the time, the numbers simply dont work as well.
You are not factoring in that on pcp the car will be worth more than the final balloon payment (ie that your will most likely have some equity in the car if you choose to sell it/trade it in)
Also, where did you get that quote from for a 208GTI on pcp? If it is from the Peugeot website then that is a hugely unfair comparison. You need to get quotes from the cheapest broker to compare.
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[TW]Fox;28284252 said:
Both are likely to trap you in a never ending cycle of 'renting' cars and I could only see myself wanting to lease a runabout/every day car at the cheaper end of the spectrum. But for the reasons I added earlier and the costs are better known before taking out the lease.
If manufactures advertised their PCP prices up front (BMW did do this a couple of years back, but have since removed them), had a more realistic FGMV and had a lower upfront payment I'd be more interested in them.
So what if its worth more than the balloon payment? If you send it back and get a new car your still in the same situation.
That was from The main dealer yea.
But from what i have seen the PCP is still more expensive no matter what
You'd have to be insane to hand it back and start a new PCP - the whole point is that the equity pays the next deposit, which doesnt happen with a lease.
It's not more expensive no matter what - if you take a good lease special offer and compare it to a poor PCP deal of course it will be cheaper. There are times when PCP will be cheaper and times when leasing is cheaper.
Exactly. you never just hand the car back at the end of a pcp unless you are mad or have gone bankrupt.
and comparing a 3rd party lease deal to a manufacturers set pcp deals/prices is silly.
Ok then.
Go find me a PCP deal that has NO deposit and is cheaper per month than the lease price.
On a 208Gti. 10kPA £201.74Pm
You wont.
Link to the lease deal?
You wont find a cheaper monthly payment, but you might well find cheaper total cost of ownership.
However, finding a PCP deal involves going through brokers and applying via finance companies, nobody is going to do that to prove a point on the internet.
https://www.vehiclesavers.com/car-leasing/peugeot/208-hatchback/1.6-thp-gti-prestige-3dr.html
Im going to apply for it come september
https://www.vehiclesavers.com/car-leasing/peugeot/208-hatchback/1.6-thp-gti-prestige-3dr.html
Im going to apply for it come september
FYI there's no option for "no deposit" on there - there's at least a £200 deposit but that only applies if you do an 18 month deal.
You wont find anyone doing a PCP over 18 months, 3 years is normal so to do a fair comparison you need to look at a 3 year lease too. So the figures actually look like
£235.94 per month x 36 months = £8493.84
3 advance rentals = £707.82
Total = £9201.66
You're also likely to get a bill once it's returned for any damage - alloy scuffs etc.
PCP is a bit harder, but doing some sensible guessing
Purchase price of 17k (broadspeed lists 15.7k but going for dealer finance will push this up)
What car says year 3 value is about £8.6k so we'll put GFV at 7. At 5% APR with an £800 deposit, this works out at £304.90 per month.
304.90 x 36 = £10,976.40 + 800 = £11,776
So the total cost of PCP over that period is ~£2500 higher but you've got about that much in equity. You can also move it on at month 36, month 6, month 35..... Or you can actually keep it if you want to.
Doing a decent rate PCP on a 6 month old one would be a good balance of low monthly payments, flexibility and lower TCO
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I only want it for 18 months and its 1+17 so £3618. Dunno where you got ur numbers from
I got the numbers from the link you gave for a 3 year deal, to make a fair comparison with PCP. Thought I explained that
Anyway you wont find PCP or HP cheaper for 18 months, of course not - you're barely keeping it for more than a rental period!
Not in my experience. 6 month old vehicles don't come with the big new car discounts, so are rarely much cheaper, plus you don't get the special low rates on the PCP deals, so they actually often work out more expensive.
Exceptions are usually on cars that don't have big new car discounts. Such as Jags and Range Rovers and such. But for a 208 GTI with upto £4k discount on a new car, you will struggle to find a 6 month old example that works out cheaper on PCP. If you want a 6 month old one, the best way to finance it would be either via a 0% credit card (if you can get the limit, and the dealer will take the payment that way), or with a bank loan.
Each car and situation will be different - which is the point really. My last car was on PCP at 9 months old and 8k miles and was nearly 50% of the list price. In that instance and for my requirements/circumstance it was the best way to do it.
Just to note it is the prestige he is looking at which is £16,407 on broadspeed.
What we are trying to tell you is that the lease deal is not some magic cheaper option when taking into account total cost of ownership.
You are simply paying the depreciation the car will suffer for those 18 months.
The cheapest 2 year old 208 GTi on autotrader is £11k and that has 34,000 miles on it. So that has lost £5.5k from the broadpseed price we see today in two years and 34k miles
The lease deal over 2 years would work out as £4824k but with only 20k miles .
So as you can see, the actual cost of ownership/deprecation is not really any better with the lease.
Broker 4 Cars shows this:
£15,946.40
Deposit £2,000.00
Balance to Finance £13,946.40
Monthly Payment £197.77
Final Payment (GFV) £7,403.00
Total Amount Payable £ £18,895.96
Representitive APR % 6.9%
Excess Mileage Charge No Charges
So actually looks cheaper for it to be bought on PCP. Plus i can have it longer
(if i sell my car and pay a deposit)
£15,946.40
Deposit £2,000.00
Balance to Finance £13,946.40
Monthly Payment £197.77
Final Payment (GFV) £7,403.00
Total Amount Payable £ £18,895.96
Representitive APR % 6.9%
Excess Mileage Charge No Charges
So actually looks cheaper for it to be bought on PCP. Plus i can have it longer
(if i sell my car and pay a deposit)
That is a very good discount, over 20% on rrp!
I would check that is for the facelift new version though and not unregistered stock of the old one.