Good lease deals on less than great cars
- Thread starter kaptainmarc
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![[TW]Fox](/data/man-of-honor/2009.png){kind=avatar}
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Hi mate, serious question, what is the best way generally to buy a car?
Actually it's a stupid question as it obviously depends on many things, what do you do though?
There is no 'best' way, it all depends on your circumstances. Some ways are cheaper than others but not everyone can access every way to 'buy' a brand new car outright (e.g. cash). I say 'buy' because leasing isn't buying its renting and PCP is a sort of middle ground.
For some leasing works, others PCP, others its cash. What matters is not getting ripped off by dealers because they will sell you a car for X price and sell the exact same car for Y price depending on the day of the week/month. The list price as Fox says is meaningless because no one pays it unless you are buying a Tesla or some rare super car where only 100 are built.
For some leasing works, others PCP, others its cash. What matters is not getting ripped off by dealers because they will sell you a car for X price and sell the exact same car for Y price depending on the day of the week/month. The list price as Fox says is meaningless because no one pays it unless you are buying a Tesla or some rare super car where only 100 are built.
It's obviously not perfect but:
- List price is a known quantity, best available discounted price is not readily available for all models
- Depreciation rate/future value/GMFV on a PCP differs by car
- PCP interest rates differ by make/model/trim
2 year depreciation on a car is probably around 35% in reality. Everyone knows discounts are available on a car, so nobody would use 35% of list price as a good guide. Something around 20% means that even after discount you are likely to be beating depreciation and therefore cheaper than a PCP deal.
Use the 20% to filter out all the crap deals and you are left with some good ones and (yes) some not so good ones but at least you have a much smaller sample to do detailed cost calculations on.
Soldato
But real depreciation isn't on list so I'm not sure it makes sense to use it.
Up your PPP count bro, it's only on page 1572 pages long and I post one "deal" - and it all kicks off.....
Nobody is making you use it, just ignore if it's not helpful to you
Soldato
That's not the discussion point is it? The challenge put forward is if it is actually helpful to anyone in understanding the merits of a lease deal.Nobody is making you use it, just ignore if it's not helpful to you
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The other discussion I have with people that blows my mind with leases is when the comparison against depreciation over two years is used by people who previously have always bought at 1 to 2 years old. So... its slightly cheaper than the massive depreciation that you previously avoided by buying used?!
Whilst I lean more towards the 'list price is irrelevant' school of thought, this is a good explanation of why list can be used in an indicative way, given that list price is readily available and 'best achievable' price takes a bit of research. Basically you for cheap lease deals and then having identified what seem to be some good deals on face value you can check brokers etc to see what you'd have to pay outright.
20% is an arbitrary value but you have to pick something for a rule of thumb and it is low enough to exclude just plan bad deals running at a high percentage of list price.
To counter that argument they are getting a brand new car not a 1-2 year old car. They might have previously bought used because they felt the depreciation was too high, but given in your example the lease is cheaper than the depreciation it may have dropped to an acceptable level that they consider worth it for getting the new car rather than a used car. In other words the lease brings down the cost delta from having a new car versus a used car.
so do you disagree with lordrobs that all things considered (depreciation running costs reliability) that intersecting the depreciation curve after 1-2years does not remain the sweet spot ? .. you have just relinquished the new car smell, but someone else has potentially had the inconvenience of the infancy problems, payed the vat ....
and if they think the reverse ... they have just not done their homework to find that 1-2 year old
Caporegime
Soldato
I had never heard of the % of list price thing either, it makes some sense on models where you cannot achieve much discount on the price, but then those same models are unlikely to have a special lease deal either.
I suppose for a very quick first check seeing a <20% vs list in cost means it could be a good deal.
It still makes sense to check the PCP equivalent though which requires a little work.
I suppose for a very quick first check seeing a <20% vs list in cost means it could be a good deal.
It still makes sense to check the PCP equivalent though which requires a little work.
^^I'm not looking to get into a debate about whether buying a 1-2 year old car is a good thing or not, I'm just explaining why people who previously did that might be tempted by a lease, because it may be cheaper than the depreciation. So they get the best of both worlds - a brand new car, but losing less money on depreciation compared to having bought it outright, which may have been the reason they used to buy 1-2 year old cars. Essentially, the goalposts may have moved, so it is valid for them to approach the scenario differently than they did last time.
^Basically the idea is if is less than 20% of list price then it is probably at least worth looking at because it is very rare to get discounts more than about 30% off list price, meaning that <20% of list has a good chance of still being competitive even against heavily discounted cars.
Example would be, you lease a 40k car for under 8 grand. Whereas if you bought that car via a broker for say 31k then sold it after 2 years and get say 23k back. So you'd lose 8k on depreciation whereas the lease was cheaper.
Of course that is just made up numbers but you get the idea. Some marques like Mercedes seem to have massive discounts on brand new this year which means I would most likely be favouring purchase over lease on them.
^Basically the idea is if is less than 20% of list price then it is probably at least worth looking at because it is very rare to get discounts more than about 30% off list price, meaning that <20% of list has a good chance of still being competitive even against heavily discounted cars.
Example would be, you lease a 40k car for under 8 grand. Whereas if you bought that car via a broker for say 31k then sold it after 2 years and get say 23k back. So you'd lose 8k on depreciation whereas the lease was cheaper.
Of course that is just made up numbers but you get the idea. Some marques like Mercedes seem to have massive discounts on brand new this year which means I would most likely be favouring purchase over lease on them.
Remember even if you bought for £31k then sold for £23k either you had a load of money tied up in the car or you paid another £2-3k in interest payments making your true cost £11k...
Soldato
Leasing for the first time, see other thread.
Mercedes A250 AMG Line (Premium Pack)
- services and maintenance (tyres etc) included
2 years, 8k mileage
£1640 upfront and approx £273 a month.
Mercedes A250 AMG Line (Premium Pack)
- services and maintenance (tyres etc) included
2 years, 8k mileage
£1640 upfront and approx £273 a month.
Soldato
How much more was the service package? Tyres should last a lot longer than 2 years at 16k and you may even be lucky and get away without the service
Soldato
As part of the contract you have to service the car at Mercedes. There is definitely one service involved but potentially two, although I have read that some manage to return cars on a 2 year lease without doing the 2nd service. If I recall correctly it was about £25-30 a month extra for that.