Why not save some outgoings on the lease car and get a decent BEV instead? ~£7k over 2 years will give you lots of options, much cheaper to run and no need for maintainence package, unless you want it for the peace of mind.
Leasing worth it?
- Thread starter Jae-So
- Start date
Why not save some outgoings on the lease car and get a decent BEV instead? ~£7k over 2 years will give you lots of options, much cheaper to run and no need for maintainence package, unless you want it for the peace of mind.
Deleted User 298457
Deleted User 298457
I dunno man it is a hard business case to prove. There aren't many new cars where depreciation after 3 years is as low as £6-7k. My E43 is of course not a good example, but the kind chap who bought it new took a £35k hit to allow me to buy it for £32k - before you include his interest on top of that!
Either I've had incredible luck with used cars, or having to pay £1k in repairs every year is not typical. I've had plenty of 10+ year old cars, bought for at most £3k, kept for 2-3 years, never spent more than £2-300/year on repairs (maintenance is irrelevant, a 10 year old car is going to have the same tyre/brake/servicing requirements as a brand new one).
Even worst case scenario, and the car is worth £0 at the end, that's £3.6k/24 months = ~£150/month, not sure what kind of lease/PCP you could get for that, but I would guess it's going to be a tiny little shopping trolley on wheels, or very limited mileage (or both!).
Obviously this does depend on the type of car you go for. a £3k "budget" marque (Ford, Vauxhall, something Japanese) etc. is likely to be in significantly better condition than a £3k "premium" marque such as an Audi, Merc or BMW. The former can easily give you several years of relatively trouble free motoring (I bought a Focus for £1.7k, did 60k miles in it over 2.5 years, during which time the total cost of repairs was £30 for a spring). The latter has a good chance of being a money pit!
Spot on, I think the total cost of ownership looks similar if I buy something decent, regardless of the method of purchase.
It's all going to end up costing me around £10k over 3 years (before factoring in the Fiesta sale).
- lease at £260 for 3 years plus £2.3k including maintenance = £11.5k spent
- buy new with loan and sell after 3 years = £9k of depreciation.
- buy new with PCP (8k miles) = £13k spent - based on various places (either taking advantage of good equity in the car or good dealer deposit contributions).
- Buy 19 plate with PCP (6k to 8k miles) - based on a few PCP deals (residual value of £2k based on guaranteed future values) = £8.5k spent
Maintenance costs on top of this for all.
That's just to keep it as close to apples to apples, it seems the loan option is the most cost effective one, but I'm not sure I want to borrow £20k unless I am going to keep it long-term.
Lease seams better than PCP unless I go for an older plate (but reduced warranty and unexpected costs could increase this).
Obviously keeping what I have (because it is paid off) is by far the cheapest option but the other ones don't seem that different.
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Deleted User 298457
Deleted User 298457
Don't PCP a used car, that is a proper mugs game. 9.9% APR at best from what I can see.
Anyway, you are clearly doing "man maths" where logic and reason do not enter, as you want a shiny new 'sales rep' BMW and by hook or crook you shall get one. See you again about 18 months in when you get bored of it and are asking whether you can dump the negative equity into another PCP as its "only" £40 on top of the £260 you're already paying.
This is frankly nonsense - even if that's what they're trying to frame a used PCP around, there is absolutely no way on earth a 19 plate BMW is going to be worth £2k in 3 years time.
Presumably this should say £12k or £20k?
Edit - the option you're missing in there, is 'Buy 19 plate with a loan'.
If you're buying new, chances are you can get 0% finance that'd be just as sensible as getting a loan, maybe even better with some finance incentives thrown in.
The loan option is ideal for buying a used car that's a couple of years old, account for some extended warranty etc. - the problem being now that the new car market is so sparse, nearly new used cars are just crap value if you're trading up the scale rather than down.
Haha I am doing man maths but I think it's a fair analysis. You're right PCPing a used car seems like trouble because of unexpected costs.
I did admit at the end that by far the cheapest option is to just keep the Fiesta.
Instead of £10k over 3 years it'll be like £1k.
I need to decide if I really want to jump in now.
Sorry I used the wrong term, what I meant is that you would have built in about £2k of equity in the vehicle (the guaranteed value fluctuated depending on each deal) and I have taken that away from how much was spent over the life of the deal to get to a figure of about £8.5k of spend over 3 years.
Deleted User 298457
Deleted User 298457
Nothing about the unexpected costs - PCP on used cars is just garbage interest rates from the get go with dubious residual value calculations.
The one lesson learned I would offer for PCP, is not dick about jumping into a long-term PCP deal on a garbage car. Yes the Fiesta is whack, but it is what it is. A 320D is going to be fun for about 20 minutes but you'll soon get badge/car envy and I guarantee will end up in pretty heavy regret around 18 months. You'll test the water on swapping, and convince yourself that now your new PCP car needs tyres, a service and whatever else - that it is cheaper to clear the neg equity and get another car.
Point is - don't just jump into this. Spend a bit more on a car you can actually live with, with absolute GLEE, for the period of the lease/PCP/whatever. It is miserable being stuck with a massive car payment you can't get out of. It is even more miserable if you dislike the car.
Where am I (or anyone else) claiming £1k in repairs every year? I posted that the costs of servicing, MOT and tyres were ~£1k over a 3 year period but did not factor that cost into the depcreciation/loan interest of my example. My apologies if I was not clear but I made no such claim that maintenance on a used car is typically £1,000 per year.
My advice was people need to look AT THEIR SPECIFIC case and what they are prepared to pay. It was not a general statement that leasing is always better. Merely that in many cases when all things are considered, leasing and buying used may end up with similar monthy costs. Especially if you end up purchasing the used one on some dodgy dealership finance deal.
My advice was people need to look AT THEIR SPECIFIC case and what they are prepared to pay. It was not a general statement that leasing is always better. Merely that in many cases when all things are considered, leasing and buying used may end up with similar monthy costs. Especially if you end up purchasing the used one on some dodgy dealership finance deal.
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Yeh good advice.
Leaning towards just keeping another year while I really think about what I want
I absolutely agree with this. There is a balance with everything in life and used cars are no different. If I was looking at a £20k finance deal on a car I would rather have a 1 year old BMW/Audi/Merc with 2 years of warranty for, than a brand new Ford Focus or Golf. But once you start looking at £10k - £15k when those BMW.Audi/Mercs are well out of warranty, then you are taking a major risk.
I was referring to this post:
Either he is terrible at judging the condition of cars, buying something completely unsuitable, doing mega mileage, or just very, very unlucky
Yeh if I could find a good looking one for that I would be happy (call me a snob).
That's fundamentally the point of the upgrade, getting something a little nicer, but starting to lean towards keeping the car I have.
The sensible option is to stick with what you have, stick the ~£200/month saving in an ISA for a couple of years, and reward yourself with something much nicer than replacing a run-of-the-mill hatchback with a run-of-the-mill hatchback with a (subjectively) better badge
The biggest hurdle you have is that the traditional route to 'save money' by buying into a year old approved used car, with ongoing manufacturer warranty etc. and other 'new car' ease of running, just doesn't work at the moment.
Rather than making a massive saving due to initial depreciation, you're probably actually paying more for immediate availability.
I just looked up the 118i M Sport on BMW AUC and CarWow.
CarWow suggest new price is available at £26,000.
The cheapest 1 year old example on the AUC site is £23,500 with 16k on it, so only a £2,500 saving from what you could pay new. There's only 2 under £25,000.
Rather than making a massive saving due to initial depreciation, you're probably actually paying more for immediate availability.
I just looked up the 118i M Sport on BMW AUC and CarWow.
CarWow suggest new price is available at £26,000.
The cheapest 1 year old example on the AUC site is £23,500 with 16k on it, so only a £2,500 saving from what you could pay new. There's only 2 under £25,000.
Yeh probably what I'll end up doing.The sensible option is to stick with what you have, stick the ~£200/month saving in an ISA for a couple of years, and reward yourself with something much nicer than replacing a run-of-the-mill hatchback with a run-of-the-mill hatchback with a (subjectively) better badge
Yeh I agree the nearly new thing is probably not worth it.
I was referring to this post:
Either he is terrible at judging the condition of cars, buying something completely unsuitable, doing mega mileage, or just very, very unlucky
Apologies guys, I see the confusion now and I was using that as a worst case annecdotal scenario. I should have said it was not indicative of a typical used car experience. And yes this guy has zero interest in cars and all he cares about is "does it have an MOT" and cost £1,000 - £2,000. Though I don' think buying a 10 year old Zafira with ~100,000 miles and expecting it to run hassle free for 2-3 years has anything to do with luck.