Buying, leasing and all that jazz

Aruffell

Aruffell

Aruffell

Soldato
Joined
29 Dec 2004
Posts
5,653
Location
Chatham, Kent
Hi all,

So been through this decision time and time again but am looking for some more information if possible.

Mrs has a Ford Kuga 2.0 Titanium with Titanium X pack and sat nav and upgraded 19" wheels on a 60 plate. Done around 50,000 miles and if we're lucky, we average around 32.7MPG out of it. Big, heavy, automatic, therefore terrible fuel economy.

Also, the kids are now growing up so no need for a big heavy, juicy car so was looking to get her a 120d m sport auto 5 door. Called up BMW to see what ball park we're looking at and it's anywhere from around £14,000 - £20,000 without going new new.

Asked for a price on her car as a rough guestimate as we paid £16,500 in May 2014. Turns out, they said it's worth a slither under £9000 now. When he said that I couldn't believe it. £7500 in 2 years is not good motoring in my opinion. That's £3750 a year.

I already worked out that by getting a 120d in tax and fuel alone we'd save £2300 across 3 years and I doubt that we'd see depreciation anything like that of the Kuga.

So my question goes back to the age old one of buying vs leasing. We know that she needs to downsize it and a 120d seems to be the right choice, but would leasing be the better option? Obviously you'd have nothing to show for it at the end, but don't have to deal with the mess of trying to sell it etc... and knowing that you lose thousands every year in depreciation.

She also gets fuel allowance at 45p a mile and at 60mpg and current fuel prices, I've worked out that it would cost around 9p a mile meaning that's 36p per mile in her pocket to cover wear and tear etc... but if leasing, that wouldn't be so much of an issue.

36p over 10,000 miles is £3600 which should cover a leasing cost of around £300 per month.

Hopefully my maths is right, but anyone else had a similar experience, what did you do?

Thanks,

Andy
 
The cheapest option will be to buy a 2-3 year old Approved Used 120d M Sport and then trade/sell it when you've finished.

Leasing is convenient but unless you snag a bonkers-deal, which don't typically tend to be on 120d's, then it's also the most expensive way to run a car.

The value for your Kuga seems reasonable if a little low. A Titanium with no options has a trade value of £9k at your mileage.
 
So u ring one dealership who are trying to bend you over with there trade in value and you believe them? Sell your car privately what is wrong with people? I would never trade a car in unless its broken. And that mpg is not bad if it's local driving. Your just convincing yourself you will save loads of money on mega mpgzzz
 
[TW]Fox;30132276 said:
The cheapest option will be to buy a 2-3 year old Approved Used 120d M Sport and then trade/sell it when you've finished.

Leasing is convenient but unless you snag a bonkers-deal, which don't typically tend to be on 120d's, then it's also the most expensive way to run a car.

The value for your Kuga seems reasonable if a little low. A Titanium with no options has a trade value of £9k at your mileage.
Click to expand...

Thanks for the reply. Was hoping you would :)

Generally looking to keep cars for around 3 years but I fear this Kuga is just going to keep dropping and with tax coming up (£230) I thought now might be the right time to get rid of it.

What rough price would you put on the Kuga?

I was looking to have a relatively low cost to change but I fear that won't happen.

Did just find a personal leasing deal which works out at £13,790 over 3 years, so £4596 per year. Does that not sound like a good deal?

Got so many numbers flying around now. I'm not bothered about a new car but want something newer than the Kuga and that will not cost us £3750 a year. Trying to keep the cost of ownership as low as possible as it's a bitter pill to swallow.

Thanks,

Andy
 
Dav4 said:
So u ring one dealership who are trying to bend you over with there trade in value and you believe them? Sell your car privately what is wrong with people? I would never trade a car in unless its broken. And that mpg is not bad if it's local driving. Your just convincing yourself you will save loads of money on mega mpgzzz
Click to expand...

I also looked at Parkers which says about the same, Autotrader seems a little bit more but not much more to be honest. I normally sell my cars privately, but don't want to be sitting on the car for ages while it doesn't sell, hence calling up to find out trade in value.

That MPG is terrible, when a 120d will get 60, almost double. It's also £200 a year cheaper to tax the 120d.

Andy
 
Aruffell said:
Did just find a personal leasing deal which works out at £13,790 over 3 years, so £4596 per year. Does that not sound like a good deal?
Click to expand...

No, it's a very terrible deal. That's huge money to spend per year on 1 Series. I'd balk at a 5 Series for that much.

Let's randomly grab a 120d M Sport that looks alright off the AUC site and work out a crude cost over 3 years.

Here are two quite different examples:

http://usedcars.bmw.co.uk/1-Series/...58115-605913593-3496996.aspx?srcmdc=se_na_re_

3 year old 125d M Sport, Pro Nav, Sport Auto, Xenons, but cloth seats. However good value at £16995. Probably get it for £16500.

A 6 year old 123d of the previous generation is worth about £9k in trade. Let's imagine you chucked £500 a year on a BMW Warranty after the first year.

16500 - 9000 + 1000 = 8500 / 3 = £2800 a year all ni - for a quite good spec 125d.

Perhaps you'd prefer newer.

http://usedcars.bmw.co.uk/1-Series/...59542-605432670-3497120.aspx?srcmdc=se_na_re_

This is a very high spec less than 1 year old 120d M Sport with the new engine - so it's in effect identical to a brand new one (Only with lots more spec, those leases will be bare bones spec).

Let's go with a residual of £13k - a 4 year old current model is worth more than that but in 3 years time we'll be onto a new 1 Series.

£22000 - £13000 + £500 for 1 year warranty (It's got just over 2 years already) = £3166 per year

So both options MUCH cheaper than a lease - and both much higher specification.

I reckon I'd favour that newer 120d over the older 125d based on those numbers, but of course:

a) The more you spend the more your cost of capital, presumably you'd borrow the difference from the bank at about 3-4% APR
b) The more you spend the bigger your exposure to risk. These are fag-packet numbers, if the residuals are say 10% out on each that makes the more expensive option a bigger financial risk than the cheaper one.

But I'd still be amazed if either don't work out quite a bit cheaper than a brand new lease on the numbers you've quoted.

FWIW I also specced a brand new one through a broker - 120d M Sport 5 door auto with MEdia Pack, M Sport Plus pack, comes out at £27k. If we assume a residual of around £16k after 3 years that comes out at around £3700 a year. Which IMHO is getting towards being too expensive but still beats that lease!
 
Last edited:
[TW]Fox;30132346 said:
No, it's a very terrible deal. That's huge money to spend per year on 1 Series. I'd balk at a 5 Series for that much.

Let's randomly grab a 120d M Sport that looks alright off the AUC site and work out a crude cost over 3 years.

Here are two quite different examples:

http://usedcars.bmw.co.uk/1-Series/...58115-605913593-3496996.aspx?srcmdc=se_na_re_

3 year old 125d M Sport, Pro Nav, Sport Auto, Xenons, but cloth seats. However good value at £16995. Probably get it for £16500.

A 6 year old 123d of the previous generation is worth about £9k in trade. Let's imagine you chucked £500 a year on a BMW Warranty after the first year.

16500 - 9000 + 1000 = 8500 / 3 = £2800 a year all ni - for a quite good spec 125d.

Perhaps you'd prefer newer.

http://usedcars.bmw.co.uk/1-Series/...59542-605432670-3497120.aspx?srcmdc=se_na_re_

This is a very high spec less than 1 year old 120d M Sport with the new engine - so it's in effect identical to a brand new one (Only with lots more spec, those leases will be bare bones spec).

Let's go with a residual of £13k - a 4 year old current model is worth more than that but in 3 years time we'll be onto a new 1 Series.

£22000 - £13000 + £500 for 1 year warranty (It's got just over 2 years already) = £3166 per year

So both options MUCH cheaper than a lease - and both much higher specification.

I reckon I'd favour that newer 120d over the older 125d based on those numbers, but of course:

a) The more you spend the more your cost of capital, presumably you'd borrow the difference from the bank at about 3-4% APR
b) The more you spend the bigger your exposure to risk. These are fag-packet numbers, if the residuals are say 10% out on each that makes the more expensive option a bigger financial risk than the cheaper one.

But I'd still be amazed if either don't work out quite a bit cheaper than a brand new lease on the numbers you've quoted.

FWIW I also specced a brand new one through a broker - 120d M Sport 5 door auto with MEdia Pack, M Sport Plus pack, comes out at £27k. If we assume a residual of around £16k after 3 years that comes out at around £3700 a year. Which IMHO is getting towards being too expensive but still beats that lease!
Click to expand...

Thanks for the extensive post. I guess I just have the fear of pumping another £17,000 into a car and losing almost half of its value in 2 years.

Would you tend to go for a newer car with higher mileage or older car with lower mileage? Just looking through BMW's AUC site now to see what's available.

Andy
 
I care about two things when buying an AUC:

a) Condition
b) Ability to extend warranty for reasonable price once it expires.

So this means that provided the car is in immaculate condition and it'll have less than 60k miles on it once the warranty expires, I'm happy.

Some cars are tatty, others are mint and mileage has surprisingly little bearing on this. My current one had 6k on it, my last one had 30k on it and condition wise they were both pretty much identical - ie, immaculate. I intend to keep my current one for many years and I'd be disappointed if it wasn't in broadly the condition it is now in many years to come - you just need to look after them! Sadly many people do not.

I guess generally the chance of a minter will decrease with age and mileage.

I've also seen some hounds..
 
The Ford probably won't be losing 3k a year from now on if you're offered 9k. (9k/30 months as it has been more than 2 years) so even though you're saving £600/yr in fuel and tax you're paying the depreciation on another newer car. I'd change if you want to change as the costs are similar to what you have been paying, but it won't make any "savings" until you've had it for 3+ years.
 
Aruffell said:
I've got a 3 series touring. That hasn't lost no where near £7500 in 2 and a bit years.
Click to expand...

I'm not sure thats relevant - his point is basically sound. If you buy any reasonably new car at circa £20k its going to lose a lot of money. The flipside is that losing a lot of money is pretty much all it'll do and maintenance and repair costs will be low.

As a car ages, its depreciation profile shows. Your Kuga will lose significantly less money over the next 3 years than the last 3 years.

The depreciation you've incurred on the Kuga is a reason not to buy another reasonably new Kuga, not a reason to get rid of your current one, if that makes sense.
 
So is there a sweet spot in terms of buying a car? Any websites that show depreciation trends for cars in a chart of some kind?

Thanks,

Andy
 
Aruffell said:
So is there a sweet spot in terms of buying a car? Any websites that show depreciation trends for cars in a chart of some kind?

Thanks,

Andy
Click to expand...

Your gambling depreciation against running costs.

A reliable 10 year old car will be good for depreciation but may have higher running costs.

Ive always bought older cars outright and accepted the higher running costs.

I think 5 or 6 years old is likely to be a good age to look at.
 
Aruffell said:
Asked for a price on her car as a rough guestimate as we paid £16,500 in May 2014. Turns out, they said it's worth a slither under £9000 now. When he said that I couldn't believe it. £7500 in 2 years is not good motoring in my opinion. That's £3750 a year.
Click to expand...
A brand new car is know to lose around 40% in the first 3 years

Of cause some models will lose less then this and some more..
Done around 50,000 miles and if we're lucky
Click to expand...
50,000 miles is very high for a 2 year old car so that will also be knocking your trade in price down a lot
 
Last edited:
36p over 10,000 miles is £3600 which should cover a leasing cost of around £300 per month.

Hopefully my maths is right, but anyone else had a similar experience, what did you do?
Click to expand...
But would 10,000 miles per year lease be enough ?

As you clocked up 25,000mile per year in your Ford Kuga (Based on your kugo being 2 years old and having 50,000miles)
 
Last edited:
Aruffell said:
and with tax coming up (£230) I thought now might be the right time to get rid of it
Click to expand...

Aruffell said:
That MPG is terrible, when a 120d will get 60, almost double. It's also £200 a year cheaper to tax the 120d
Click to expand...

Tax/ved is hardly a factor in the total cost of ownership (apart from cars in the £500 bracket) - going forwards on new cars there won't be the super low £20 and £30 brackets, almost everything will be a single flat rate anyway afaik.
 
You must log in or register to reply here.
Back
Top Bottom