Leasing worth it?

Jae-So

Jae-So

Jae-So

Soldato
Joined
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Hey guys, what has your experience been with leasing vehicles.
  • Does it make sense to financially?
  • Does it all feel worth it over other purchase strategies?
I'll set the scene for my use case.
We have a low mileage 2014 plate Qashqai as a family car and a 14 plate Fiesta. We really hate the Fiesta and only drive it when necessary.
It appears I can get £4.5k+ for it if we sell.

I've been looking at a few low priced lease deals and found a 2021 BMW 118i M Sport (manual). It's not the fastest, but seems plenty for my use. The interior looks really good on these newer ones too.

This would cost as follows:
  • 2 or 3 year lease
  • 10k mile limit (I work from home so plenty)
  • About £2.3k down
  • £260 a month lease
  • £25 a month maintenance
Thoughts?
 
I didn’t personally want to spend £300 a month for something I’d give back after 3 years when I looked at cars.


You’ve currently got a fiesta, which you own outright.


You’re thinking of selling it to get a car which will cost you £285 a month. Every month. For 2-3 years.



And you seldom drive it anyway :)


If you don’t need/really want it, it seems a waste of your money to me :cool:
 
MrRockliffe said:
I didn’t personally want to spend £300 a month for something I’d give back after 3 years when I looked at cars.


You’ve currently got a fiesta, which you own outright.


You’re thinking of selling it to get a car which will cost you £285 a month. Every month. For 2-3 years.



And you seldom drive it anyway :)


If you don’t need/really want it, it seems a waste of your money to me :cool:
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Yeh it's a fair point and I'm considering just scrapping the idea, but I really hate the Fiesta. :D

I would use it, but yeh I'll probably do like 7k miles or something a year.
 
Out of interest, what do you dislike about the fiesta?

If it’s the general fit and finish, get a second hand polo or golf - you’ll own it then :-)
 
MrRockliffe said:
Out of interest, what do you dislike about the fiesta?

If it’s the general fit and finish, get a second hand polo or golf - you’ll own it then :)
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Eh it's just meh, uninspiring to drive and just feels a bit ****. It was originally my wife's car and I never liked it, but since we got the Qashqai 2 years ago she hardly drives it and can tell she hates it as much as me.

It's had a couple of issues too about a year ago, but touch wood has been solid since. Thinking about capitalizing on it's value while we can.

It also has a weird damp smell that we can't get rid of, even after getting two different garages to look at it multiple times and after many deep valet services. That's not the main reason but doesn't help.

Polo would feel the same to me TBH.
A decent Golf (say 16 plate, under 50k miles, 1.6l) is typically £10k or so. So yeh I guess £6k (and maintenance costs) vs about £8k with the lease (balancing out with the money we get from selling).
I don't like them that much though.

I guess the only two options I'm really looking at are:
- Lease something semi decent, not over the top and well within budget.
- Keep the Fiesta.
 
Jae-So said:
Give it back. I'm happy with that.
PCP deals typically end up that way anyway from seeing friends use it. They hardly ever pay the balloon.
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At which point you have to find another 3k as a deposit for the next lease at x a month. I see why people do it as it gets you into a new car at an affordable monthly payment but add up the lifetime cost and you will have wasted an epic amount of money!

If you hate the fiesta so much then sell it and just buy something you like for 4/5k it’s not like you are going to drive it loads or are a petrol head who will get a kick out if owning a nice certain motor.
 
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Its just long term renting, so long as you are not worried spending some of your disposable and remembering you have to do it again in 2-3 years its all good. There are lots of pretty decent smaller cars to lease quite cheaply, ie 150-200 a month.

Last 4 cars were leases, varying from £150 a month to £400 a month using the wife's car allowance as we only need 1 car.
 
a1ex2001 said:
At which point you have to find another 3k as a deposit for the next lease at x a month. I see why people do it as it gets you into a Jew car at an aff out travel monthly payment but add up the lifetime cost and you will have wasted an epic amount of money!

If you hate the fiesta so much then sell it and just buy something you like for 4/5k it’s not like you are going to drive it loads or a petrol head who will get a kick out if owning a nice certain motor.
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Yeh I've had a look at around £4k to £5k and there's nothing I really like. So plan B if I decide it's a bad idea is just to keep the Fiesta and deal with it.

I've always been a buy 2nd hand guy, but I did that with a previous BMW 320D (had it from 65k miles to 110k miles) and got killed on repairs over the 3.5 years I had it, then got rid of it for next to nothing. I guess vs that use case I could've had a 3 year lease and been no worse off, while having driven something nicer.

You're right though I could just deal with it and keep the Fiesta... As much as it irks me.
 
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chroniclard said:
Its just long term renting, so long as you are not worried spending some of your disposable and remembering you have to do it again in 2-3 years its all good. There are lots of pretty decent smaller cars to lease quite cheaply, ie 150-200 a month.

Last 4 cars were leases, varying from £150 a month to £400 a month using the wife's car allowance as we only need 1 car.
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Yeh I saw a couple okay ones a touch under £200. The reason I am looking at this is the jump from those cars to this for around £70 a month was quite a lot.

I guess part of this is I've never actually driven something decent and less than 6 years old at time of purchase. Seems like a relatively affordable deal.
 
You need to look at how often you change your car and how much you generally spend on the replacement after trade in. Factor in HP/Loan costs (if applicable), depreciation and running costs (servicing and maintenance).

It is worth remembering that even if you think owning your car is better than leasing, your are in an endless cycle of monthly costs. It just takes on a different form.

My experiences were get £10k used car with loan or HP (that push actual price up nearer £12k), have crap 6 month warranty. It would cost ~£500 avg per year on servicing and the inevitable maintenance/repairs and costs grew each year as the miles mounted. Depreciation alone was about £2k per year. So about £2,500 - £3,000 per year or on loan interest, maintenance and depreciation and add to that the pain in the hole it was when it was off the road due to the inevitable breakdowns. Over 3-4 years of ownership you have starter motors, electrical faults, CV joints, exhausts, gearbox problems, MOT tests/checks etc.

So if your £10k 4 year old car with 50,000+ miles actually costs about £220 - £250 per month all things considered, then a £200 - £250 per month lease on a brand new car can make sense. Though I do think £285 per month and £2.3k down is a reach.

The main question is will you actually use it and do you need it?
 
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ICDP said:
You need to look at how often you change your car and how much you generally spend on the replacement after trade in. Factor in HP/Loan costs (if applicable), depreciation and running costs (servicing and maintenance).

It is worth remembering that even if you think owning your car is better than leasing, your are in an endless cycle of monthly costs. It just takes on a different form.

My experiences were get £10k used car with loan or HP (that push actual price up nearer £12k), have crap 6 month warranty. It would cost ~£500 avg per year on servicing and the inevitable maintenance/repairs and costs grew each year as the miles mounted. Depreciation alone was about £2k per year. So about £2,500 - £3,000 per year or on loan interest, maintenance and depreciation and add to that the pain in the hole it was when it was off the road due to the inevitable breakdowns. Over 3-4 years of ownership you have starter motors, electrical faults, CV joints, exhausts, gearbox problems, MOT tests/checks etc.

So if your £10k 4 year old car with 50,000+ miles actually costs about £220 - £250 per month all things considered, then a £200 - £250 per month lease on a brand new car can make sense. Though I do think £285 per month and £2.3k down is a reach.

The main question is will you actually use it and do you need it?
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Yeh as per my 2nd hand BMW example I actually ended up spending more than £250/month for about 4 years and that could've gone to a better driving experience.

I think the calculation should be £260/month not £285. The £25 a month is an optional thing that basically covers tyres and other consumables of which I typically do a £200+ service every year plus consumables anyway to try and keep my cars going.

Will I use it? Yes, more than the Fiesta, I would say about 7k miles a year.
 
Depreciation seems suppressed at the moment due to new car shortages, so leases are probably going to be worse value than they were in recent years.
Historically there used to be some good deals on specific cars if you shopped around whereby you would pay less over x years than the depreciation but if cars are holding their value, then buying outright is a lot more attractive.
 
HangTime said:
Depreciation seems suppressed at the moment due to new car shortages, so leases are probably going to be worse value than they were in recent years.
Historically there used to be some good deals on specific cars if you shopped around whereby you would pay less over x years than the depreciation but if cars are holding their value, then buying outright is a lot more attractive.
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You raise a good point about the market but I actually interpret the situation differently.
  • New car shortages are unlikely to last 3 years. So buying a car for the long-term will mean that as soon as the supply situation improves those 2nd hand values will plummet.
  • It's a seller's market/bubble for 2nd hand cars right now, so buying one right now at inflated prices is actually worse value in my opinion.
Partly why I say I think it's going to be lease or just keep the Fiesta.
 
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Leasing/PCP is probably the most expensive way to get into a new car, I think the issue here is thinking that spending £250 a month on repairs/maintenance on a 4 year old car is somehow normal?!

I've owned a variety of older cars (8-10 years), and I don't think a single one has cost me more than £100/month on average (excluding fuel/VED).
 
Haggisman said:
Leasing/PCP is probably the most expensive way to get into a new car, I think the issue here is thinking that spending £250 a month on repairs/maintenance on a 4 year old car is somehow normal?!

I've owned a variety of older cars (8-10 years), and I don't think a single one has cost me more than £100/month on average (excluding fuel/VED).
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It's also a flawed and irrelevant calculation as saving on that isn't a product of leasing it's a product of having a new car with a warranty. Leasing is merely a method of financing that and should therefore be compared with other methods of financing that at which point it's usually the case that leasing is the most expensive and least flexible method of financing a new vehicle purchase.

It appeals to people who can't see beyond monthly payment costs.
 
Disagree with the depreciation costs listed for a 10k used car. My Golf was £10,495 and about 4.5 years old when I bought it, and over nearly 6.5 years it’s depreciated about £1200 a year. Granted, 6.5 years is a longer ownership period than average. Don’t think maintenance has been as expensive as cited either.

Used buys are under appreciated still. Look at the MOT records on 10 year old Civics, and much of the time they pass only with advisories for things like tyres and wipers (down to the owner, who should spot these beforehand anyway).

Doubt there are any leases that can trump used for value, even with prices at the moment being a bit higher.
 
Haggisman said:
Leasing/PCP is probably the most expensive way to get into a new car, I think the issue here is thinking that spending £250 a month on repairs/maintenance on a 4 year old car is somehow normal?!

I've owned a variety of older cars (8-10 years), and I don't think a single one has cost me more than £100/month on average (excluding fuel/VED).
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I owned a 20 year old Pajero, commuted with it daily and it cost me less than 250 a month maintenance. Probably closer to 80pm for maintenace if it'd to roughly divide it up in my head but I did have a lot of crap to replace on it at one point.

Though it seems owning a 1 series over 3 years, you'll lose about £7k so if the full cost of PCP is £11k over 3 years then you'll lose roughly £4k? But you'll get a brand new car rather than a 2nd hand and of course servicing bills. Examples are a 2019 v 2016 118 m sport.

https://www.autotrader.co.uk/car-details/202107295619766?radius=1500&advertising-location=at_cars&postcode=wv73np&model=1 SERIES&make=BMW&include-delivery-option=on&onesearchad=New&onesearchad=Nearly New&onesearchad=Used&year-to=2019&sort=relevance&year-from=2019&page=1

https://www.autotrader.co.uk/car-details/202108176333984?radius=1500&postcode=wv73np&model=1 SERIES&advertising-location=at_cars&include-delivery-option=on&make=BMW&sort=relevance&year-from=2016&year-to=2016&onesearchad=New&onesearchad=Nearly New&onesearchad=Used&page=1

Assuming 7k miles a year, this seems (roughly) right?
 
Haggisman said:
Leasing/PCP is probably the most expensive way to get into a new car, I think the issue here is thinking that spending £250 a month on repairs/maintenance on a 4 year old car is somehow normal?!

I've owned a variety of older cars (8-10 years), and I don't think a single one has cost me more than £100/month on average (excluding fuel/VED).
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I never made that claim. I merely said in the past when I had an older BMW it ended costing a lot. In that specific deal/instance I would've been better off with the lease over the 4 years I had it as it would've cost the same and I would've had a better experience.

For clarity, the £250 a month was the cost of the car (£8k) and £4k of repairs amortized over 48 months.

Buying a new car in any way is always going to be relatively expensive, but leasing to me makes more sense than a new car purchase. If buying I would have to go second had, or keep what I have (that's an option) I don't like it but might keep it.

The money I made selling it (around £800 as the electronics were shot) roughtly offset the servicing costs too (not included in above repair calculations).
 
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