Leasing - experiences?

[Hodders]

We make about 2 trips a year down to my brother in Catalonia.

I'd rather do that in a 10k mile car at the bottom of the bathtub curve than a 100k car that is rapidly climbing the end of the curve. It's one of the reasons we are thinking of changing out 105k miles Hyundai i40.

The stronger argument would be to buy a 2 year old car at - say - 20k and keep it for 6 or 7 years until it's done 90k+ a depreciation of about 17k.

But also bear in mind leasing means I have £28k+ sat in savings/offsetting mortgage/in an ISA.

It is swings and roundabouts - plus being honest, I quite like the idea of a new car with new tech.

 

[radderfire]

It is swings and roundabouts - plus being honest, I quite like the idea of a new car with new tech.

Well, each to their own, but I would say a 90K Superb won't be rapidly climbing the end of the bathtub curve. I would also say the experience of driving a 6/7 year old Superb would be pretty similar to driving a 2 year old one.

You can almost buy the car for what you would pay in lease charges.

Also, re electric cars, I wouldn't say the overall experience was that great, particularly with the state of the charging network. This would be an argument for keeping an ICE car longer, although I do accept electric has green plus points.

 

[Hodders]

Well, each to their own, but I would say a 90K Superb won't be rapidly climbing the end of the bathtub curve. I would also say the experience of driving a 6/7 year old Superb would be pretty similar to driving a 2 year old one.

You can almost buy the car for what you would pay in lease charges.

Also, re electric cars, I wouldn't say the overall experience was that great, particularly with the state of the charging network. This would be an argument for keeping an ICE car longer, although I do accept electric has green plus points.

Appreciate your point.

My thinking is this:

Buy 2 y.o. car for 28k, keep for 7 years. Total cost 17k depreciation plus the 4% interest on 28k purchase price that I will lose (the 28k that won't be in an ISA, it will have bought the car) over 7 years (9k) = 17k+9k = £26k

Lease cost £4k per year, over 7 years = £28k cost. But I will earn some interest on the £28k (less over time as I use it up to pay for the lease), so lets say I earn £4.5k interest. Total cost. 28k - 4.5k = £23.5k

Lease costs less, plus I get a new car every 2 years.

Feel free to tell me I'm talking rubbish! I'm happy to take criticism

 

[Hodders]

Well, each to their own, but I would say a 90K Superb won't be rapidly climbing the end of the bathtub curve. I would also say the experience of driving a 6/7 year old Superb would be pretty similar to driving a 2 year old one.

You can almost buy the car for what you would pay in lease charges.

Also, re electric cars, I wouldn't say the overall experience was that great, particularly with the state of the charging network. This would be an argument for keeping an ICE car longer, although I do accept electric has green plus points.

I'm happy to accept that a Hyundai i40 will almost certainly age less gracefully than a Skoda.

 

[radderfire]

My thinking is this:

Buy 2 y.o. car for 28k, keep for 7 years. Total cost 17k depreciation plus the 4% interest on 28k purchase price that I will lose (the 28k that won't be in an ISA, it will have bought the car) over 7 years (9k) = 17k+9k = £26k

Lease cost £4k per year, over 7 years = £28k cost. But I will earn some interest on the £28k (less over time as I use it up to pay for the lease), so lets say I earn £4.5k interest. Total cost. 28k - 4.5k = £23.5k

The point I am making is it's way cheaper to buy a 6 year old car, and it will give you quite a similar experience for way less money.

If I had to choose between your two options, I would rather buy the 2 y.o. car, but that's me. Gut feeling is that the lease deal would still be a worse deal. If you owned the car, you could keep it longer. You are clearly willing to pay a lot to drive a newer car, whereas I drive a 2005 Focus.

 

[Journey]

You are clearly willing to pay a lot to drive a newer car, whereas I drive a 2005 Focus.

Also, re electric cars, I wouldn't say the overall experience was that great,

I look at those two statements and wonder how you can have any idea of what the OP is after, and that you have never owned or driven an EV for any length of time in your life.

 

[Kenai]

Leasing route.

I assume you actually have a valid quote ready to accept for this but I would double check it's definitely for a new model Superb, because looking on their site, I can't see anything even close to the sort of price you've quoted in the OP.

They're showing an 'offer' for a 1.5 Hatchback at £364pm+£1094 but all the estates look to be well over £750pm on a 3+23 structure.

On a related note - this is something worth considering when doing your comparison as above - "Lease cost £4k per year" - to achieve this, you'd probably have to be willing to take whatever happens to be on offer when you need a new car each time to achieve that sort of value. £4k per year for a new model Superb class estate is not 'normal' pricing.

 

[Haggisman]

The other thing to consider is that you lose a lot of flexibility with leasing.

There's no right to early terminate, and unlike PCP/HP/bank loan, you can't sell the car and settle the finance. If your circumstances change then you're potentially stuck paying for a car that no longer fits your needs for 2-3 years.

 

[radderfire]

I look at those two statements and wonder how you can have any idea of what the OP is after, and that you have never owned or driven an EV for any length of time in your life.

The OP has stated what he's after. I've also read/watched a lot of car reviews and commentary. You don't have to own a car to know the consensus opinion on it. Re electric cars, there are issues such as time needed to charge, availability of chargers, performance in the cold, range and overall cost.

 

[radderfire]

I look at those two statements and wonder how you can have any idea of what the OP is after, and that you have never owned or driven an EV for any length of time in your life.

Also, my main argument in this thread is that an older car would be a similar experience for a lot less money, so seeing that I have a 2005 Focus that is still in quite good condition then I think I'm well qualified to give an opinion on that.

 

[squerble]

There's no right to early terminate, and unlike PCP/HP/bank loan, you can't sell the car and settle the finance. If your circumstances change then you're potentially stuck paying for a car that no longer fits your needs for 2-3 years.

Not quite true. Most leases do have a right to early termination, however there is a financial penalty for doing so. For example, my Tesla lease allows early termination but with a cost of 55% of the remaining payments. The lease I had on my previous Kona also had a similar setup, though I don't remember the exact figures.

 

[Haggisman]

Not quite true. Most leases do have a right to early termination, however there is a financial penalty for doing so. For example, my Tesla lease allows early termination but with a cost of 55% of the remaining payments. The lease I had on my previous Kona also had a similar setup, though I don't remember the exact figures.

Yes sorry, it is of course possible, but the penalty for doing so is significantly higher than other finance routes!

 

[[TW]Fox]

Feel free to tell me I'm talking rubbish! I'm happy to take criticism

Your point relies on you being able to find a 'bargain' lease deal every 2 years. How likely is this in practice?

Remember, a lease deal is generally priced based on the depreciation - the lease company purchases the car, you use it, they sell it, incur the depreciation and have to make a profit despite that. They'll pay less than you could for the car (but they're not getting 50% off a new car) of course, but on average, leasing will usually end up being more expensive.

Over the next few years its going to become more and more difficult to buy reasonably priced new cars which are powered by petrol engines so it is reasonable to suggest it will be more difficult to find the sort of excess stock around that leads to really good leasing deals.

 

[Moobert]

I assume you actually have a valid quote ready to accept for this but I would double check it's definitely for a new model Superb, because looking on their site, I can't see anything even close to the sort of price you've quoted in the OP.

They're showing an 'offer' for a 1.5 Hatchback at £364pm+£1094 but all the estates look to be well over £750pm on a 3+23 structure.

On a related note - this is something worth considering when doing your comparison as above - "Lease cost £4k per year" - to achieve this, you'd probably have to be willing to take whatever happens to be on offer when you need a new car each time to achieve that sort of value. £4k per year for a new model Superb class estate is not 'normal' pricing.

If it was the new Superb I would take one for the price OP quoted personally, I myself havent seen estate models anywhere close to that price.