Leasing/buying car (or any other option)

[IndianaMac]

The missus does PCP - works for her, as the last three cars she's just handed back at the end of the deal rather than paying the balloon, and there's always been more value than the "guaranteed future value" trade-in as the cars are given back in good nick and with fewer miles than the deal allows. No worries about MoTs, always under warranty - hassle-free motoring.

Monthly cost is kept down, as you're effectively only financing half a car, plus the missus gets servicing tagged into the deals.

If you don't get attached to a car, it's a decent way to go.

I did PCP for my one and only brand new car, and ended up buying outright at 3y/o due to the manufacturer dropping the model (Mazda 3 MPS - Mazda haven't done a hot hatch since). Traded in at 8y/o for a 3y/o car bought via combination of trade-in value and car loan - yup, costing me twice as much monthly, but it's a keeper and once the loan's paid, car's mine.

Low miles (don't commute in it), fun factor, completely wrong way to do it for an A to B car you'd not get attached to though.

[stupet11]

PCP v Leasing.

IF deposit (v's initial hire charge / admin fee), term, servicing, annual mileage / charge, and monthly cost is same or similar, isn't PCP the better option as you MAY end up with a car worth more than the balloon payment...and if it doesn't your options are same as leasing, walkaway or take out another deal?

[estowife]

We always buy outright, I can't see it being financially better any other way. My friend & I have almost identical cars (hers has a much smaller engine) and she leases hers on the NHS lease scheme. Over 3 years it has cost her £13,000, we worked out that if I had only kept mine the same 3 years, it would have only cost me £6000 (because of the money recouped in resale). So we always buy outright (nearly new), keep 5 years plus & sell while they've still got decent mileage, decent value & no problems. Its always worked for us

[paw]

We have bought via PCP for years and have always traded in early. We have always looked at it as renting and have never yet managed to hand a car back and not increase our payments, albeit by a small amount. That was until our Mercedes B Class. When we decided to trade in it was 3 years old and didn’t make the deposit on the next car, was way in negative equity. Mercedes didn’t like it when we handed it back once we reached the percentage payment required.

New car again on PCP but never again. Only 1 year in and DH diagnosed with cancer. Looked into contract and estate has to pay up to percentage unless dealer buys it back. Depends on dealer. Something that had never crossed our minds, in the old days of HP we had always got payment protection.

[YorkshireT]

Originally Posted by estowife

We always buy outright, I can't see it being financially better any other way. My friend & I have almost identical cars (hers has a much smaller engine) and she leases hers on the NHS lease scheme. Over 3 years it has cost her £13,000, we worked out that if I had only kept mine the same 3 years, it would have only cost me £6000 (because of the money recouped in resale). So we always buy outright (nearly new), keep 5 years plus & sell while they've still got decent mileage, decent value & no problems. Its always worked for us

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I don't know what car your friend was leasing at 13,000 over 3 years, but I've had Mercedes CLS (60k car) for £350 a month, BMW 335 (46k car) for £375 a month and an E Class for even less. These were all on 2-3 year deals, 10k pa miles (or 12) 3 payments down including first payment. No servicing to pay on the 2 year cars, road tax included. Unless your pal is driving around in an exclusive 50k+ car, or gone massively over mileage and paid a ton of fees, she has paid well over the odds on a lease at 13k for 3 years for a normal type car (if it was, but if you only lost 2k a year it doesn't suggest an expensive car unless it was super desirable and difficult to get). Secret of good lease deals is good internet research and looking out for the good offers (there are always some). nationwidevehiclerentals is a good site. Leasing isnt as good for people who do high mileage.

[Pavilion1983]

Really useful post and some really useful information shared. Thank you!

We pick up our first leased car from the dealer next week. After shopping around the lease seemed the best financial option for us.

If it helps anyone, I came across a lease comparison site called cars2buy Popped in the car I wanted and the terms ( deposit, term, maintenance etc) then contacted a couple of the lowest priced companies and played them off each other. Then finally negotiated with the dealer to beat the lowest price.

It’s worth noting that some of the lease companies have some really good special offers if you not looking for a particular vehicle

[mossyflossy]

We've previously purchased outright, new or nearly new, and kept for years, but now looking at leasing. Like the idea of a new car every 2-3 years and the certainty of stress free driving at a fixed monthly outlay. Been stung in the past buying private second hand so that's not an option for us.

[gl20]

Originally Posted by YorkshireT

I don't know what car your friend was leasing at 13,000 over 3 years, but I've had Mercedes CLS (60k car) for £350 a month, BMW 335 (46k car) for £375 a month and an E Class for even less. These were all on 2-3 year deals, 10k pa miles (or 12) 3 payments down including first payment. No servicing to pay on the 2 year cars, road tax included. Unless your pal is driving around in an exclusive 50k+ car, or gone massively over mileage and paid a ton of fees, she has paid well over the odds on a lease at 13k for 3 years for a normal type car (if it was, but if you only lost 2k a year it doesn't suggest an expensive car unless it was super desirable and difficult to get). Secret of good lease deals is good internet research and looking out for the good offers (there are always some). nationwidevehiclerentals is a good site. Leasing isnt as good for people who do high mileage.

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Wow. How are you only paying £350 for a 2 year lease on a £60k car? If I take a quick look at the cheapest CLS with those terms and servicing (and the 3 month deposit) then price with VAT on the first lease site I googled (which was actually the one you noted above) was a ‘hot deal’ of £820 per month (which was what I would have guessed based on the lease co needing to cover about £20k depreciation and a bit of interest on the capital plus a small margin less marketing support). I know there’s always going be times when, as you say above, they need to push cars out and deals to be made etc... but £820 down to £350?! Best I could see on there for around £350 for same lease terms was an SLC (£380).

[Pieces]

I'm so glad this thread exists.
I wonder if anyone can help me, here is my plan...
I currently have a car on hire purchase (buying the car with a car loan) over 5 years. I'm now in the 4th year and have about 1.7k left to pay off within the next year.
We are cash strapped at the moment and could do with selling the car. If we paid the 1.7k off the car we would own it outright and could sell it and get about 6k which would help enormously. I'm then thinking of starting a brand new lease on pcp this time as obviously we still need a car and would be able to put just a small deposit down and be left with about 5k.
Does this all sound like a good plan?
Basically we need a bit of extra cash and also a decent car so I'm thinking this is the only option?
I should probably add I've found it a little more difficult to find decent budget cars and I can only drive automatic.
If anyone sees any great auto deals please let me know 😊

[YorkshireT]

Originally Posted by gl20

Wow. How are you only paying £350 for a 2 year lease on a £60k car? If I take a quick look at the cheapest CLS with those terms and servicing (and the 3 month deposit) then price with VAT on the first lease site I googled (which was actually the one you noted above) was a ‘hot deal’ of £820 per month (which was what I would have guessed based on the lease co needing to cover about £20k depreciation and a bit of interest on the capital plus a small margin less marketing support). I know there’s always going be times when, as you say above, they need to push cars out and deals to be made etc... but £820 down to £350?! Best I could see on there for around £350 for same lease terms was an SLC (£380).

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Just the deal available at the time. I keep an eye out and have always had an open mind. For example good deals on BMW M2 at the mo.