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I've always bought my cars outright and tend to hold onto them for around 4-5 years. I'm currently running an Alpina D5
I honestly don't understand why 'non business users' people go for the finance option.
I'm looking for some info on car purchase options if possible as I know there are a good few of you who finance / lease your cars.
I've always bought my cars outright, and currently have an M4 worth around £50k, but looking to get in to a Range Rover Sport.
Now I have the cash to put to it, but am now thinking there must be a reason why people lease / finance / PCP cars so looking for info as to the benefits and/or flaws with this?
Bare with me as I'm new to this and have never really looked at this purchase option, I have always been in the "why pay interest on a depreciating asset" camp when I have the funds to buy outright, but all you lot can't be wrong ;-)
Cheers
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I've always bought my cars outright and tend to hold onto them for around 4-5 years. I'm currently running an Alpina D5
I honestly don't understand why 'non business users' people go for the finance option.
Exactly, I could put one through my business but I don't want to get hit with BIK, my accountant says they are just not worth it anymore.Originally Posted by CaptainSlow
I can see how a finance deal may work if you "cannot" afford to buy the car outright, you just make sure the monthlies are doable and away you go, but is there a benefit to someone who CAN buy the car outright?
I can see that some people may want to have the cash available for other interests etc which is a fair point, so PCP etc is ideal, but with so many people doing this now I just want to know if there is an actual benefit to it or if it's just an easy way for average joe to get in to an expensive car without having to outlay the full OTR price ticket.
think about what your M4 costs you a month to own (in depreciation terms / loan repayments if any etc) over 2 years
compare that to what you would be charged on a 2 year PCP rental, there may not be a massive difference, if there is and you have the cash you are better off buying
Was a different case for me, I've just switched from running cheap disposable snotters to leasing a new car for the first time.
I didn't have the spare cash available to go out and buy a £19k hot hatch - and if I did I probably wouldn't do it as the depreciation would make me cry, but convinced myself through (possibly dubious) man maths that it wasn't that much more expensive than continuing with what I had been doing - with the upside that I was driving a brand new car rather than something more decrepit.
For me the lease deal stacked up - (It's not an option to buy, or hire purchase - just a lease) basically for 24 months I pay someone £167 (I also pay them two more months worth in month one), for that I get a £19k car for two years, taxed with warranty and roadside assist and no MOT worries - I just have to do no more than 10k miles per year, or I'll have to pay a bit more. I need to insure it, keep up the service schedule and keep it in consumables. Total cost £4.3k. Then I give it back.
Any money I have in the bank can stay there, or be used for something else.
Compare this to running snotters - I usually budget around £1k per year for the car (i.e. if I buy for a grand I'll need a new one next year - £2k should get me a couple of years etc) but then add in the unknowns of MOT costs etc, tax and MOT and it starts to get close. Then factor in that the old car is about 50% the fuel economy and has no warranty so anything significant going wrong means buy another and it gets even closer.
I came to the conclusion that with a bit of luck it could be around £1000 cheaper per year to run the old car. But with bad luck could end up being the same or more. Whilst weighing up the risk there's also the fun factor - new hot hatch vs 12 year old mondeo. Minimal downside and lease costs right side of affordable with no significant upfront outlay = why not!
Depreciation is often the same or more than the lease payment a month and also it's not your 50k car parked on the road outside, you may choose to invest that 50K elsewhere that's more beneficial long term, plus you can just hand the car back at the end of the term so it makes disposal stress free as well.
I've done both, prefer leasing now. I find I don't worry about the car so much as it's not mine, it's the leasing companies. I'm just renting it from them.
Are you gilford from the forum of old BM3W ?
Last edited by Vanguard; 22nd April 2016 at 16:54.
Yes, I am that gilford, miss that forum :-(
Problem is with the cars I'm looking at there seems to be a good chunk down and then monthlies north of £700 a month, seems much easier to just put £15-£20k to the M4 and buy outright?
Depreciation is a killer, but I always manage to get a good deal for cash so it's never as bad as what people think.
id look a little closer at the deals
as some manufacturers do great deals i.e. bmw 640d for £599 a month with no upfront
I rather like my Buy-a-Barge policy.
Find a decent old Merc with lots of history for under £2k. Buy it and run it until it gets expensive.
Repeat.
The first 190 2.5D did 100k plus on nothing more than consumables. Then, sadly, it got toshed in an accident.
The current C270 CDi does 50mpg, goes like stink (then does 45mpg) and cost £1,750 with 70k on the clock and a full history. So far it's been fuel, tyres and a track rod end. Planning on keeping it a while.
There shouldn't be much difference between leading and buying, as residuals are residuals.
The reason it's sometimes cheaper to lease certain cars is due to the manufacturer or capital company wanting to push certain models for whatever reason.
If you want a specific model with a specific spec, it'll be no cheaper to lease. Just my observations.
Main difference in a finance lease is the lack of up front cost. I've just privately leased a £35k car and had to pay only £2k up front.
The monthly lease cost should be around depreciation, so no real loss of value by leasing instead of buying, and I don't have to find or borrow the £35k.
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I am a personal lease convert why tie cash up in tin when it could be invested elsewhere making a return rather than losing you a fortune.
Sums - Wifeys R 12 months ago list was £32k. Today private sale £23-4k ish lease is costing us £3,300 a year for two years. £9k depreiation vs £3,300 lease..
I have a similar deal on my next car (list £53k) which should be with me next month.
I am currently leasing a VW Scirocco R. (rrp £38k)
My first leased car.
It's costing me £2400 upfront. £249 per month (inc. options of metallic paint & DSG box) for 23 months.
So all in, it's costing me just north of £8k over 2 years.
My previous car (BMW 320i) which cost me £7k which I sold 2.5 years later for £1k.
I'm a real car nut/nerd, but earn a humble wage.
If I had bought a car outright instead of getting the 'R' I would have been looking at another £7k-ish motor which would have most likely suffered the same kinds of depreciation as the BMW.
Leasing, for a not so large amount more, opens me up to a whole world of options I'd never be able to consider otherwise.
That's why I do it. There are other reasons too - trouble free motoring, no servicing, no tax, new car smell, but I won't bore you any more!
Or just choose a car with minimal depreciation, and buy outright. Not an M nor an RRS though.
I'm in your camp, what am I missing?
ive been through a fair few cars in the last few years, a mixture of Audi A4 cabriolet, Mercedes c class, Volkswagen Golf etc..I've lost money on all of them. I couldn't not look at the lease deal for which I ultimately went for. Brand new factory order skoda yeti, fully loaded, panoramic roof, self parking, leathers, nav etc (£27k worth), for £1500 upfront and then £169 a month for two years. It's just cheap motoring. When I had the c class it was a year old and immaculate. I live on a busy road and was always worried about white van man smashing the mirrors etc. With the lease car I dont worry at all. The added bonus is I don't have a large amount of money tied up in a depreciating asset. Let others worry about how much they have or haven't lost in residuals.
With that in mind, what would happen if white van man did marmalise your mirror to oblivion. Who replaces it ?
I thought lease cars get marked down on damage and you have to cough up for it when handing back at the end of your term ? Genuine question....
A load of guys in the refinery where I work have been doing leasing through centralukvehicleleasing.co.uk
some of the deals are amazing- a scirocco tfsi was 85/month over 2 years iirc?
ps no affiliation whatsoever, jut passing the news
I'd replace it-via insurance. Rather damage was done to a £25k+ car I didn't own. I find I no longer have an emotional attachment to my car. It's become a cheap, reliable, workhorse that has no worries attached to it-unlike a £25k+ purchase. Lease companies are also abiding by a new code of conduct for fair wear and tear on their cars, I think the days of marking every single superficial mark are over, I've read countless reviews of leasing companies being quite lenient.
I honestly don't get the point in losing so much money on cars, whether driving them off the forecourt or leasing. Either way the depreciation of the asset is something I just can't stomach.
5 years ago someone wrote off my VW Golf 130 TDi that had done 170k miles. Never missed a beat or dealt me a single mechanical issue. I replaced it for 2k with another 130bhp TDi that had done 130k miles with full VW history. It's now done 220k miles and is as good as when I got it. I don't care if it gets dirty, I don't care if it gets written off, and I love the fact that it's given me far less issues than my wife's 3 year old C250 which we've already lost around 4k in value on. That's a nice watch right there.
Good luck in your hunt, I just don't get it. Not trying to be provocative, just my tuppence
Had my 640 for 6 mo this nearly. Gran coupe. Did it on CH for 3 years. 3k deposit and just over 500 pm including the VAT (I'm in finance and were vat exempt so important to have total costs). Total cost was 68k to buy. Interestingly they offered me a 6 month old one that the Dealer Principal had for 45k!!!! That's why I don't buy.
My dad has a new Range Rover sport which I think would be just over 80k for his model and he pays around 1100 pm including vat (he can claim back half) from memory.
To me never worth buying new as the 3 year retained value is nearly always less than you've spent on leasing.
As a side note I have a limited company and I don't put car through but charge mileage per month and that works better.
Been looking at the numbers recently as we're looking to get a second car, the car the wife wants is £22k new by the time she has done 30k miles per year the projected residule value is about £8k so it will lose £14k in that time, total cost for the wife to lease full maintained is a little under £9k over the three years.
What if you plan to keep the car long term. Surly better to buy outright with delivery miles/a couple of years old?
Got a deal emailed for a 335d touring with delivery miles from BMW, with over 8k off. Quite tempting...
I drive company cars but also tend to finance a car for the wife, which often doubles up as family / weekend car for me.
I like to own the asset at the end, so tend to go for finance where I put in a deposit, pay monthly then a balloon at the end to finally purchase. We bought a 2 yr old £31K X5 this way, deposit was around £11K, total cost was £33k over 4 yrs and I kept it for 6, effectively costing me £330 per month once it was sold.We've just done the same with a Disco Sport, it'll be interesting to see what residual value that has at the end of the agreement.
I use Lombard for finance, Apr around 3.76%.
Ian
I have been thinking about leasing recently. I like my cars but always lose a fortune. My current car car costs me about £850 pm for the finance and about the same again monthly in depreciation (plus I put about £10K in at the front end). Seems crazy for a 3 year old car that I will never end up owning anyway (fairly big baloon at the end). Might as well get something decent on lease then hand the keys back in 2 years time. Was looking at an Audi S8 for about £750pm which seems like great value compaired to my current car!
We need a second car, but with my elder son approaching driving age, I don't think I can even look at leasing - will any allow someone that young to learn in or drive their car? - as a non - petrolhead, I've seen plenty of £5k VW up!s with very low mileage, fantastic mpg, hopefully decent reliability (and can be had for that money on a VW approved scheme). Very low insurance, no tax, seems like a no brainier - and can be his first car and/or family runabout, small enough to park anywhere and I won't worry about it in the slightest, as I intend (at that price) to run it into the ground. Or are there lease alternatives?
This may be of interest Mr Robdad^^
https://www.centralukvehicleleasing....HATCHBACK.html
Do you have a link Niall?
Looking at BMW website, it looks higher than that, or £10k and £550 ish
Cant remember exactly where where I saw it there was a few threads I read
heres one
http://www.pistonheads.com/gassing/topic.asp?t=1195553
not sure if it's still available
Thanks - that thread is 4 years old 🙂 But it does have a link to Britannia who have them at £538 per month with £3k down.
Back in 2012, they were available £360 odd per month
Sorry ! I did see something more recent maybe search hotukdeals or piston heads the 4 door deffo had some cracking deals, unfortunately unavailable to me in Ireland
There are some cheap deals around, but the best way is not to say I want this car and then look for a deal its what's my budget and then look what's around, Audi Q7 £309 per month plus vat. Tiguan at £99 per month. Look around and see what's on a special deal that you fancy, but don't add too many extras, as they just bump up the monthly. Also don't be in a rush best deals are usually factory order 12-16 weeks. Read the small print and enjoy a stress free 2/3 years in a new car. For me as I get an allowance from work, I am just using that money and have some rules to meet. But if I had cash maybe a different decision would be made.
But not all purchase prices are the same and so depreciation is not always the same either.
I was in our local Volkswagen Dealer a couple of weeks back, replacing a vehicle that I'd had a a good few years and had my money out of. I'd put down a deposit on one I liked and then spent some time at home working out various finance options from paying straight cash to various finance deals and decided that I wanted to do it on a part cash and part finance through my bank who were happy to give me a very good APR on a loan...
The lady sales rep in VW had been great, giving me tests drives of various vehicles till I decided what I wanted and then it came to talking to he chap in the dealership who dealt with the finance and that's where things went badly wrong. The guy persistently tried to bully me into buying the car through VW finance and no matter what I said about wishing to pay the way I had decided, continued to harangue me with what he had decided was a better way for me to do it...
Eventually I decided I had a choice between flooring him and quietly standing up and walking out and chose the latter, much to the consternation of the lady car rep who had negotiated the sale.... Not my best car buying experience and I definitely won't be using them again !
Thanks for that link goat re the VW up. I still really don't get these lease deals (especially for a dull workhorse car like the up) - I think I'd rather buy a decent used one with some warranty left, and drive it into the ground as a runabout/son's learner car with no concerns about sticking to a certain mileage, the odd scratch and kerbed wheel here and there would be no issue and I'd actually own it in the end. I could also get it serviced at a decent local garage etc. Seems like a good way to drive a fancy car you can't really afford but for a small boring hatch it doesnt make any sense to me at all. The maintenance option seems very expensive - how much do consumables cost on a car like n Up???!
That wasn't in the Barnstaple dealership was it? I took my mother in law there to buy a new one for cash (she was prepared to pay 20k to 24k) and he tried to force her into doing it on finance. I firmly said 3 times that I knew the finance option made sense but she DIDN'T want to do it and he wouldn't let it drop.
She felt extremely uncomfortable and ended up buying a car elsewhere.
So general consensus is that if it's doable buy a prestige car outright!
I see there are some good deals out there for some of the less "desirable" cars but then I suppose that's for a reason!
Think I may hang on to the M4 until September, it's paid for and can't see it losing too much over that period, plus I'll get the fun of the summer months :-)
I think it depends on the deals and your situation, some of the best deals are on the high end stuff, but not always the best model. There was a deal on an AMG C63 for £500 a month with £3k down for 3 years
Thats really good, where was the deal??
It was contract cars https://www.contractcars.com/car-lea...contract-hire/
It is actually an E63 estate saw the offer earlier and misread but think that makes a better deal
Once got a z4 on contract hire
3 years at £269 month
Then after 3 years they offered it to me for auction price £9500
I found it the cheapest way to buy the car
That's the one ! The guy has got to be a liability to that particular dealership, I may write to the boss as obviously they don't know how much damage he is doing... ....
I get the impression that if you are considering a brand new car that you will change after a 2-3 yr period it can be no more expensive, and potentially less hassle, than buying a new car.
The total cost of the lease against the cost of the new car less depreciation, servicing (if its a maintenance lease) and the final sale price isn't far apart.
However if you buy a car a year to 2 yrs old with the appropriate reduction in cost then it can't make sense to lease.
I only run one car that depreciates for my wife. She doesn't want the hassle of older stuff not working, fair enough. But I would begrudge that sort of depreciating asset for myself but its a very personal decision.
I can see the thought process behind a new car, hassle free for a set amount each month.
And that e63 looks great (and I have an e55)! But it would cost £21k for the 3 years. I have no idea how much a new e63 would lose in 3 years - £21k? No idea, seems a lot though.
By FAR the worst car sales person I've ever dealt with. Amazed he's in a job really.
Did you say Tiguan at £99 per month??
I'm pretty sure an E63 will lose substantially more than £21k in three years.
OTR price from £74,740, auto express suggest it'll be worth 42% or £31,400 after three years so over £43k in depreciation.
Last edited by Dave+63; 30th April 2016 at 14:49.
You're probably right but I'd be more inclined to buy one a year or 2 old and the appropriate price. Not sure how that might work out.
Sure enough the cheapest e63 from 2013 are £32000 on AT.
Last edited by DavidL; 30th April 2016 at 16:01.
I was going off the list price and a review from Autoexpress who suggested that it was one of the lower depreciators at a 42% retained value!
Makes leasing it at £21k seem something of a bargain!
My friend leases a 330d Gran coupe list price 42k valued after one year at £28k.
He paid 2k deposit and 380 a month
Seems most of the prestige deals are on lease rather than finance from what I have seen. I would quite like to go for an E63, or M6 or other AMG type model but I will almost certainly put more than 10k miles on it per year, so would want to go PCP or other finance deal.
Anyone seen good finance deal for prestige / sports cars rather than lease?
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