Is leasing a good option?

Aruffell

Aruffell

Aruffell

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Chatham, Kent
I have the money to buy a new car (used, but new to me) but on the same hand I'm saving my deposit towards a house so I'm faced with the option of buying the new car I was going to buy (530d M sport touring F11) or would I be better off selling my 320d as I intented to and putting the money towards the house deposit and getting the 5 series on a lease of some kind?

With a lease, I won't have the fear of losing lots of depreciation and having the hassle of selling the car etc... I know that leasing is a huge thing in other countries, but I guess that they get far better rates to us in the UK.

I know that the F10/F11 takes a HUGE hit from new in terms of depreciation so am looking for the most financially viable solution.

I get 3% interest with Santander, so am thinking that the money from my car sale would at least be put to some good use.

I await Fox to come along and give me some advice as I know he's quite clued up in this area :)

Thanks,

Andy
 
What is the monthly payment for leasing?

It's you paying the" HUGE hit" in depreciation to the leasing company who owns the car, plus a few percent extra.

Best thing for your finances: don't change cars at all!!

Best thing to do if you absolutely need to change car: buy a used car >3 years old


edit: plus, monthly car leasing payments really don't go well with mortgage applications
 
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Its not going to be the cheapest option, particularly against a nearly new car.

Remember that although the lease companies get large discounts, they want profit on top of the depreciation that the car will be left with, so that plus interest are effectively built in to the price.

That said, if putting that cash in the bank/towards a house is more important to you then it may be an option. The question I'd then ask is whether you can acquire a loan at a lower rate than your mortgage ( unlikely, unless you're in a high LTV bracket) and would it be a better option than renting the car then handing back. Depends on what you want to pay out, whether new finance would be potentially damaging credit wise ( a lease will appear like a loan too BTW) etc
 
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Leasing works well if you're getting a killer deal on the lease and are looking to buy a new car anyway.

Work out the total cost of ownership over the expected lifespan or time you're intending to keep the car and compare between the various ownership options.
 
I'd never lease as I see it as a waste of money personally, you paying for something that at the end of the day you don't own. Likewise I see buying a brand new car as also a waste of money, because as soon as you've signed the papers and your names on the V5, it's lost money because it's 2nd hand.
I also buy my car's 2nd hand as then they've already lost a good bit of their depreciation, so your not going to loose the largest chunk of money on them. I also keep my cars for a good while, 6+ years at least, and hence I do all my own servicing, car maintenance etc, so service stamps don't bother me once I bought the car.
 
Keep in mind that any monthly repayments for car leasing/loans will be assessed come mortgage approval. The Building Society insisted I pay off a personal loan (used to top up the extra couple of thousand I needed to afford the car) before they would approve the mortgage.
 
As above, though you should have a good idea how close you are to their affordability barrier without taking any extra commitments into account. If you're miles under it's fairly unlikely to cause problems
 
Thanks for all of the comments boys and girls.

Looked into the financials and at the stupidly high cost of F10/F11 BMW's, it's not suitable for me to be spending that much each month on a lease. I guess it's back to cash.

My 320d is lovely and I still love it as much as the moment that I bought it, but it's manual and when I drive into London, I feel as though I should be driving straight into a hospital for a knee replacement, so an auto is a must and my children aren't getting any smaller, so a 5 series seemed to fit the bill perfectly. Of course I fancy a new car too so I think I have enough valid reasons in my mind that a new car is a viable purchase.

New 5 series LCI coming out next year I believe, so would you wait until then, as I'm guessing the current shape would take another small hit with depreciation as people will be lusting for the LCI model, but on the same hand, my 3 series will be older and depreciating more. Decisions. HELP! lol

Thanks,

Andy
 
Aruffell said:
New 5 series LCI coming out next year I believe, so would you wait until then, as I'm guessing the current shape would take another small hit with depreciation as people will be lusting for the LCI model, but on the same hand, my 3 series will be older and depreciating more. Decisions. HELP! lol
Click to expand...

The LCI on the 5 Series was last year. There will be no major changes now until the all-new model appears in 2017.

The market for the F10/F11's are bizarre - so much so that really there are only two sensible points to buy, either buy a discounted new one or buy the oldest approved used one you can find. The stuff in the middle is just too much money and too close to the new price to be worth it. I went for the used option.

Frankly even the money you need to pay to get a good 4 year old one is frustratingly barking - you won't find a good '60 plate 530d tourer for less than about £22k.

But there we go. Shame really as IMHO it's a fantastic car and for me at least was demonstrably better than any alternative - though do check the alternatives because you might like them. The A6 and E Class are both cheaper to buy the F11 used - the E Class particularly so, you'll easily get an E350 Sport for under £20k.
 
Aruffell said:
LCI hasn't been yet?
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Yes it has? Like I said. Come on, the 5 Series is my thing, you reckon I'd get that wrong? :p

http://www.edmunds.com/bmw/5-series/2014/road-test.html 2014 is LCI. Brochure has leaked too.
Click to expand...

a) That article is dated... June 2013.
b) Edmunds is a US publication. The LCI was introduced for the 2014 model year, which in the USA began last Summer/Fall.

I'm telling you - it's a fact, the LCI was last year.

I had a 63 plate LCI 5 Series for 3 days last week! The brochure hasn't 'leaked' it's been officially published for like.. 9 months or more!
 
Ok, my bad :p lol

So what year was LCI? 2013?

Were they many differences as don't think my £25k budget will stretch that far.
 
MORE SPEED said:
Try harder :p
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I don't want 60,000 miles on the clock.

If i wanted a saloon, it would be a different story.

Find me this then:

BMW 530D/535D with less than 50k (lesser the better)
Professional Nav
Visibility pack
Preferably white, if not silver.

EDIT: M sport and do people actually like wood, as I don't :p

Good luck :p
 
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