I like to drive a decent car & dont mind paying £250pm for the privilege. Last 2 have been on 3 years PCP with Jaguar. Usually buy something less than 12 months old & pay extra for servicing & extended warranty. Means the only costs to the monthly payments is fuel & tyres.
My 3 years is up in November & looking at my options. Been driving diesels for the past 6 years & would go electric but not convinced yet of the amount & whereabouts of charging points. Hate to get stuck somewhere or have to spend 30 mins in a service station just waiting to get back on the road.
May look at leasing this time around. Usually do around 10k miles pa.
Don't forget ULEZ rules being introduced in 2021. £12 charge is it, to drive inside the S Circular if your vehicle isn't acceptable ? I got rid of my diesel this week, because of this. It would cost £300pa just to go to Charlton.
There can be good lease deals, but generally buying even with a loan is more cost effective if you buy the car initially for a good price, that’s key.
my wife’s last car before current one; 9 month old A3 s-line. Bought for just under £18k and sold for £15k 33 months later, works out at under £90 a month.
wifes current car, mini clubman, 4 months old paid £18.5k (was £10k more new) would expect that to cost about £80 a month for 2-3 years.
Had a 2.5 year old cayenne that I kept for 2 years and got back not much less than I paid.
@golfaddick likewise electric interests me, but ranges need to improve before I do. Tesla Model 3 or S is getting there.
If you have money you're more likely to get a good deal.
Yes & no. Dealers often make more from finance than they do on the cars margin,
The car dealer I used was desperate for me to take finance. Even though I flatly declined, he still tried again when I went to collect the car.
There can be good lease deals, but generally buying even with a loan is more cost effective if you buy the car initially for a good price, that’s key.
my wife’s last car before current one; 9 month old A3 s-line. Bought for just under £18k and sold for £15k 33 months later, works out at under £90 a month.
wifes current car, mini clubman, 4 months old paid £18.5k (was £10k more new) would expect that to cost about £80 a month for 2-3 years.
Had a 2.5 year old cayenne that I kept for 2 years and got back not much less than I paid.
@golfaddick likewise electric interests me, but ranges need to improve before I do. Tesla Model 3 or S is getting there.
If you have money you're more likely to get a good deal.
Yes & no. Dealers often make more from finance than they do on the cars margin,
The car dealer I used was desperate for me to take finance. Even though I flatly declined, he still tried again when I went to collect the car.
I'm not saying this to argue with anyone, even though that is what normally happens when this subject is brought up
All the value is in the nearly new used car market. I can't see the point, genuinely of leasing or doing pcp, hp etc for a vehicle. As has been said, if you don't have the cash or don't want to lay out the full price then bank loans are the best way to go and for gods sake don't secure them against the car.
You can pick up some very very decent cars now for relative peanuts and certainly compared to their list price brand new
Have a scan at some of the big retailers if you can't be bothered to look through auto trader or ebay. Ebay I have got some very decent cars from and sold a lot on.
BMW 5 series are excellent used value, fiat 500s are ridiculously cheap at the smaller end, and generally the ex fleet repmobiles such as c class mercedes, Audi A4, Mondeos, Passats etc are all decently made and will last for ages if looked after and I mean staying on top of services and not waiting until you leave a Hiroshima cloud down the road when starting it.
I cannot get my head round paying anything like 200/300 sheets a month for something unspectacular that you realistically wont own, and if you do you have paid top dollar for a much depreciated item. Horses for courses though, I prefer paying cash for a decent used car, either prefer being tied to a 3 year deal for a monthly commitment before servicing, fuel, tax, maintenance and MOTs
The usual arguments for both sides but it all comes down to one thing...cars are expensive to have and run whether you own it or rent it. It could be cheaper to buy an older car but you are gambling on nothing going wrong with it as even the basic models are full of kit that isn’t repairable and is replaced, often at a hefty expense, when they go wrong. It’s a status thing owning a new car but it’s also a safety security issue. I change mine every 2-4 years and it amazes how much more smarter each time the car gets. The cost of any of that technology going wrong if the car wasn’t under warranty doesn’t bear thinking about.
There can be good lease deals, but generally buying even with a loan is more cost effective if you buy the car initially for a good price, that’s key.
my wife’s last car before current one; 9 month old A3 s-line. Bought for just under £18k and sold for £15k 33 months later, works out at under £90 a month.
wifes current car, mini clubman, 4 months old paid £18.5k (was £10k more new) would expect that to cost about £80 a month for 2-3 years.
Had a 2.5 year old cayenne that I kept for 2 years and got back not much less than I paid.
@golfaddick likewise electric interests me, but ranges need to improve before I do. Tesla Model 3 or S is getting there.
If you have money you're more likely to get a good deal.
Yes & no. Dealers often make more from finance than they do on the cars margin,
The car dealer I used was desperate for me to take finance. Even though I flatly declined, he still tried again when I went to collect the car.
I wonder why
ULEZ will be a bit of a bugger.
People who bought diesels in good faith will have to scrap them or sell them for a pittance. Threre should at the very least be a proper scrappage scheme for all diesel owners.
It also appears to be a revenue exercise - why are the most polluting diesels still allowed to enter the zone if they pay a fee?
There can be good lease deals, but generally buying even with a loan is more cost effective if you buy the car initially for a good price, that’s key.
my wife’s last car before current one; 9 month old A3 s-line. Bought for just under £18k and sold for £15k 33 months later, works out at under £90 a month.
wifes current car, mini clubman, 4 months old paid £18.5k (was £10k more new) would expect that to cost about £80 a month for 2-3 years.
Had a 2.5 year old cayenne that I kept for 2 years and got back not much less than I paid.
@golfaddick likewise electric interests me, but ranges need to improve before I do. Tesla Model 3 or S is getting there.
If you have money you're more likely to get a good deal.
Yes & no. Dealers often make more from finance than they do on the cars margin,
The car dealer I used was desperate for me to take finance. Even though I flatly declined, he still tried again when I went to collect the car.
I wonder why
ULEZ will be a bit of a bugger.
People who bought diesels in good faith will have to scrap them or sell them for a pittance. Threre should at the very least be a proper scrappage scheme for all diesel owners.
It also appears to be a revenue exercise - why are the most polluting diesels still allowed to enter the zone if they pay a fee?
Just sell away from London, and yes it’s simply a revenue raiser, if it was really about pollution they’d be banned.
i have an old Lotus Elise, currently would fall foul as the Co2 etc is not recorded on the log book. Fortunately I can pay £180 fee to Lotus for a certificate that confirms it’s exempt.
There can be good lease deals, but generally buying even with a loan is more cost effective if you buy the car initially for a good price, that’s key.
my wife’s last car before current one; 9 month old A3 s-line. Bought for just under £18k and sold for £15k 33 months later, works out at under £90 a month.
wifes current car, mini clubman, 4 months old paid £18.5k (was £10k more new) would expect that to cost about £80 a month for 2-3 years.
Had a 2.5 year old cayenne that I kept for 2 years and got back not much less than I paid.
@golfaddick likewise electric interests me, but ranges need to improve before I do. Tesla Model 3 or S is getting there.
If you have money you're more likely to get a good deal.
Yes & no. Dealers often make more from finance than they do on the cars margin,
The car dealer I used was desperate for me to take finance. Even though I flatly declined, he still tried again when I went to collect the car.
I wonder why
ULEZ will be a bit of a bugger.
People who bought diesels in good faith will have to scrap them or sell them for a pittance. Threre should at the very least be a proper scrappage scheme for all diesel owners.
It also appears to be a revenue exercise - why are the most polluting diesels still allowed to enter the zone if they pay a fee?
Just sell away from London, and yes it’s simply a revenue raiser, if it was really about pollution they’d be banned.
i have an old Lotus Elise, currently would fall foul as the Co2 etc is not recorded on the log book. Fortunately I can pay £180 fee to Lotus for a certificate that confirms it’s exempt.
It will be interesting to see how often the emission rules are changed re vehicles entering the emission zone. They're illogical at present - I live inside the South Circular and do nearly all my mileage outside it yet come 2021 I'll be charged £12 per day despite a negligible mileage and negligible emissions over the course of a year. Somebody with a newer vehicle has an unlimited emissions allowance and will be charged nothing.
If people do a negligible mileage within the zone it seems ludicrous to force them to replace or scrap a perfectly serviceable vehicle. It seems to be adding to the problem?
I also don't want an argument but the following comments need qualification:
"...if you don't have the cash or don't want to lay out the full price then bank loans are the best way to go"
"I cannot get my head round paying anything like 200/300 sheets a month for something unspectacular that you realistically won't own"
If you don't have the cash then the interest you pay on a bank loan is directly comparable to the interest you pay under a lease/pcp deal. The interest rate on a pcp deal is subsidised by the manufacturer and you might get a 0% interest deal.
Would you get a mortgage on a house that cost £300k and was worth £200k the next day and the monthly servicing costs was higher than the cost of living in the house for a rent? Would you want to pay back £300k plus interest to own an asset worth £150k after 3 years and falling. In any other context, the idea of embracing negative equity would be seen as madness.
With pcp you own the vehicle, you just can't dispose of it without incurring charges. Taking out a bank loan to purchase the car means you pay interest on the same capital as under pcp, but you also have to repay the capital. Under pcp you make no capital re-payments unless you pay the voluntary balloon payment.
The utility benefits of a car are the same whether you own it or lease it. The practical benefit of outright ownership (of a new car) is accessible only to those who have the cash to buy outright, that is
- freedom to decide when you sell your car and to whom; - not being forced to renew your vehicle every 3 or 4 years, and - not being tied to a monthly outlay after the loan has been serviced. - owning scrap metal with a diminishing resale utility value
If you can afford a permanent motoring budget of £200/£300 a month but will never be able to save £20k+ cash to buy outright, the benefits of outright ownership are not compelling.
A car is a utility, not an investment, and the funding of the cost to acquire that utility will vary according to very individual circumstances.
Knocking leasing/pcp when you have the means to purchase outright is not being objective. Like most things, the wealthier you are the more you can reduce the cost of acquiring services and products and buying outright simply means paying less by avoiding interest on someone else's capital.
But it also denies the presence of opportunity cost where a financial reward can be obtained by leasing a depreciating asset and applying your free capital in a growth asset generating value greater than the metal you paid to drive around in and gave back after 3 years. So even wealthy people might choose to lease rather than buy if they can make better use of their capital.
It is not black and white, it's every shade in between.
I also don't want an argument but the following comments need qualification:
"...if you don't have the cash or don't want to lay out the full price then bank loans are the best way to go"
"I cannot get my head round paying anything like 200/300 sheets a month for something unspectacular that you realistically won't own"
If you don't have the cash then the interest you pay on a bank loan is directly comparable to the interest you pay under a lease/pcp deal. The interest rate on a pcp deal is subsidised by the manufacturer and you might get a 0% interest deal.
Would you get a mortgage on a house that cost £300k and was worth £200k the next day and the monthly servicing costs was higher than the cost of living in the house for a rent? Would you want to pay back £300k plus interest to own an asset worth £150k after 3 years and falling. In any other context, the idea of embracing negative equity would be seen as madness.
With pcp you own the vehicle, you just can't dispose of it without incurring charges. Taking out a bank loan to purchase the car means you pay interest on the same capital as under pcp, but you also have to repay the capital. Under pcp you make no capital re-payments unless you pay the voluntary balloon payment.
The utility benefits of a car are the same whether you own it or lease it. The practical benefit of outright ownership (of a new car) is accessible only to those who have the cash to buy outright, that is
- freedom to decide when you sell your car and to whom; - not being forced to renew your vehicle every 3 or 4 years, and - not being tied to a monthly outlay after the loan has been serviced. - owning scrap metal with a diminishing resale utility value
If you can afford a permanent motoring budget of £200/£300 a month but will never be able to save £20k+ cash to buy outright, the benefits of outright ownership are not compelling.
A car is a utility, not an investment, and the funding of the cost to acquire that utility will vary according to very individual circumstances.
Knocking leasing/pcp when you have the means to purchase outright is not being objective. Like most things, the wealthier you are the more you can reduce the cost of acquiring services and products and buying outright simply means paying less by avoiding interest on someone else's capital.
But it also denies the presence of opportunity cost where a financial reward can be obtained by leasing a depreciating asset and applying your free capital in a growth asset generating value greater than the metal you paid to drive around in and gave back after 3 years. So even wealthy people might choose to lease rather than buy if they can make better use of their capital.
It is not black and white, it's every shade in between.
Fully agree this - one thing no-one on this thread has actually mentioned that I can see is what do you do with the car when you no longer want it? Its all very well paying tens of thousands in cash but what happens if you want - or even worse need - to get rid?? For many people just pitching up at a motor dealer and hoping you get the best price is not an option or reality and as an old car dealer explained to me when I needed to get rid of a car once - how many people do you know who carry ten grand in cash around in your street? For that reason alone, leasing and pcp type finance will appeal.
I also don't want an argument but the following comments need qualification:
"...if you don't have the cash or don't want to lay out the full price then bank loans are the best way to go"
"I cannot get my head round paying anything like 200/300 sheets a month for something unspectacular that you realistically won't own"
If you don't have the cash then the interest you pay on a bank loan is directly comparable to the interest you pay under a lease/pcp deal. The interest rate on a pcp deal is subsidised by the manufacturer and you might get a 0% interest deal.
Would you get a mortgage on a house that cost £300k and was worth £200k the next day and the monthly servicing costs was higher than the cost of living in the house for a rent? Would you want to pay back £300k plus interest to own an asset worth £150k after 3 years and falling. In any other context, the idea of embracing negative equity would be seen as madness.
With pcp you own the vehicle, you just can't dispose of it without incurring charges. Taking out a bank loan to purchase the car means you pay interest on the same capital as under pcp, but you also have to repay the capital. Under pcp you make no capital re-payments unless you pay the voluntary balloon payment.
The utility benefits of a car are the same whether you own it or lease it. The practical benefit of outright ownership (of a new car) is accessible only to those who have the cash to buy outright, that is
- freedom to decide when you sell your car and to whom; - not being forced to renew your vehicle every 3 or 4 years, and - not being tied to a monthly outlay after the loan has been serviced. - owning scrap metal with a diminishing resale utility value
If you can afford a permanent motoring budget of £200/£300 a month but will never be able to save £20k+ cash to buy outright, the benefits of outright ownership are not compelling.
A car is a utility, not an investment, and the funding of the cost to acquire that utility will vary according to very individual circumstances.
Knocking leasing/pcp when you have the means to purchase outright is not being objective. Like most things, the wealthier you are the more you can reduce the cost of acquiring services and products and buying outright simply means paying less by avoiding interest on someone else's capital.
But it also denies the presence of opportunity cost where a financial reward can be obtained by leasing a depreciating asset and applying your free capital in a growth asset generating value greater than the metal you paid to drive around in and gave back after 3 years. So even wealthy people might choose to lease rather than buy if they can make better use of their capital.
It is not black and white, it's every shade in between.
Fully agree this - one thing no-one on this thread has actually mentioned that I can see is what do you do with the car when you no longer want it? Its all very well paying tens of thousands in cash but what happens if you want - or even worse need - to get rid?? For many people just pitching up at a motor dealer and hoping you get the best price is not an option or reality and as an old car dealer explained to me when I needed to get rid of a car once - how many people do you know who carry ten grand in cash around in your street? For that reason alone, leasing and pcp type finance will appeal.
As you say," an old car dealer explained to me when I needed to get rid of a car". I've never met one who will give you good news when your selling and when your buying the opposite tends to be true. Heads they win and tails you lose. They are there for their business not the customer. The fact is there are plenty of people walking around with 10k in their pocket and most probably in your very street, you don't need to find them, that's the dealers job. If the people with cash 2nd hand car dealers wouldn't exist.
In my opinion the best option is to buy what you can afford and keep it in a good state of repair. Cars don't, generally speaking, rust away nowadays so its just components that wear. As long as you keep on top of things a car will last years and years. And that's as free or as cheap as motoring can get in my mind.
I can see why people want a new car and I think its just for the same reason as they want a new iPhone.
I also don't want an argument but the following comments need qualification:
"...if you don't have the cash or don't want to lay out the full price then bank loans are the best way to go"
"I cannot get my head round paying anything like 200/300 sheets a month for something unspectacular that you realistically won't own"
If you don't have the cash then the interest you pay on a bank loan is directly comparable to the interest you pay under a lease/pcp deal. The interest rate on a pcp deal is subsidised by the manufacturer and you might get a 0% interest deal.
Would you get a mortgage on a house that cost £300k and was worth £200k the next day and the monthly servicing costs was higher than the cost of living in the house for a rent? Would you want to pay back £300k plus interest to own an asset worth £150k after 3 years and falling. In any other context, the idea of embracing negative equity would be seen as madness.
With pcp you own the vehicle, you just can't dispose of it without incurring charges. Taking out a bank loan to purchase the car means you pay interest on the same capital as under pcp, but you also have to repay the capital. Under pcp you make no capital re-payments unless you pay the voluntary balloon payment.
The utility benefits of a car are the same whether you own it or lease it. The practical benefit of outright ownership (of a new car) is accessible only to those who have the cash to buy outright, that is
- freedom to decide when you sell your car and to whom; - not being forced to renew your vehicle every 3 or 4 years, and - not being tied to a monthly outlay after the loan has been serviced. - owning scrap metal with a diminishing resale utility value
If you can afford a permanent motoring budget of £200/£300 a month but will never be able to save £20k+ cash to buy outright, the benefits of outright ownership are not compelling.
A car is a utility, not an investment, and the funding of the cost to acquire that utility will vary according to very individual circumstances.
Knocking leasing/pcp when you have the means to purchase outright is not being objective. Like most things, the wealthier you are the more you can reduce the cost of acquiring services and products and buying outright simply means paying less by avoiding interest on someone else's capital.
But it also denies the presence of opportunity cost where a financial reward can be obtained by leasing a depreciating asset and applying your free capital in a growth asset generating value greater than the metal you paid to drive around in and gave back after 3 years. So even wealthy people might choose to lease rather than buy if they can make better use of their capital.
It is not black and white, it's every shade in between.
Fully agree this - one thing no-one on this thread has actually mentioned that I can see is what do you do with the car when you no longer want it? Its all very well paying tens of thousands in cash but what happens if you want - or even worse need - to get rid?? For many people just pitching up at a motor dealer and hoping you get the best price is not an option or reality and as an old car dealer explained to me when I needed to get rid of a car once - how many people do you know who carry ten grand in cash around in your street? For that reason alone, leasing and pcp type finance will appeal.
As you say," an old car dealer explained to me when I needed to get rid of a car". I've never met one who will give you good news when your selling and when your buying the opposite tends to be true. Heads they win and tails you lose. They are there for their business not the customer. The fact is there are plenty of people walking around with 10k in their pocket and most probably in your very street, you don't need to find them, that's the dealers job. If the people with cash 2nd hand car dealers wouldn't exist.
In my opinion the best option is to buy what you can afford and keep it in a good state of repair. Cars don't, generally speaking, rust away nowadays so its just components that wear. As long as you keep on top of things a car will last years and years. And that's as free or as cheap as motoring can get in my mind.
I can see why people want a new car and I think its just for the same reason as they want a new iPhone.
The price of new cars is eye watering now. Recently rented a Peugeot 3008 when on holiday and was stunned to discover the starting price when new is 24k minimum.
I also don't want an argument but the following comments need qualification:
"...if you don't have the cash or don't want to lay out the full price then bank loans are the best way to go"
"I cannot get my head round paying anything like 200/300 sheets a month for something unspectacular that you realistically won't own"
If you don't have the cash then the interest you pay on a bank loan is directly comparable to the interest you pay under a lease/pcp deal. The interest rate on a pcp deal is subsidised by the manufacturer and you might get a 0% interest deal.
Would you get a mortgage on a house that cost £300k and was worth £200k the next day and the monthly servicing costs was higher than the cost of living in the house for a rent? Would you want to pay back £300k plus interest to own an asset worth £150k after 3 years and falling. In any other context, the idea of embracing negative equity would be seen as madness.
With pcp you own the vehicle, you just can't dispose of it without incurring charges. Taking out a bank loan to purchase the car means you pay interest on the same capital as under pcp, but you also have to repay the capital. Under pcp you make no capital re-payments unless you pay the voluntary balloon payment.
The utility benefits of a car are the same whether you own it or lease it. The practical benefit of outright ownership (of a new car) is accessible only to those who have the cash to buy outright, that is
- freedom to decide when you sell your car and to whom; - not being forced to renew your vehicle every 3 or 4 years, and - not being tied to a monthly outlay after the loan has been serviced. - owning scrap metal with a diminishing resale utility value
If you can afford a permanent motoring budget of £200/£300 a month but will never be able to save £20k+ cash to buy outright, the benefits of outright ownership are not compelling.
A car is a utility, not an investment, and the funding of the cost to acquire that utility will vary according to very individual circumstances.
Knocking leasing/pcp when you have the means to purchase outright is not being objective. Like most things, the wealthier you are the more you can reduce the cost of acquiring services and products and buying outright simply means paying less by avoiding interest on someone else's capital.
But it also denies the presence of opportunity cost where a financial reward can be obtained by leasing a depreciating asset and applying your free capital in a growth asset generating value greater than the metal you paid to drive around in and gave back after 3 years. So even wealthy people might choose to lease rather than buy if they can make better use of their capital.
It is not black and white, it's every shade in between.
Fully agree this - one thing no-one on this thread has actually mentioned that I can see is what do you do with the car when you no longer want it? Its all very well paying tens of thousands in cash but what happens if you want - or even worse need - to get rid?? For many people just pitching up at a motor dealer and hoping you get the best price is not an option or reality and as an old car dealer explained to me when I needed to get rid of a car once - how many people do you know who carry ten grand in cash around in your street? For that reason alone, leasing and pcp type finance will appeal.
As you say," an old car dealer explained to me when I needed to get rid of a car". I've never met one who will give you good news when your selling and when your buying the opposite tends to be true. Heads they win and tails you lose. They are there for their business not the customer. The fact is there are plenty of people walking around with 10k in their pocket and most probably in your very street, you don't need to find them, that's the dealers job. If the people with cash 2nd hand car dealers wouldn't exist.
In my opinion the best option is to buy what you can afford and keep it in a good state of repair. Cars don't, generally speaking, rust away nowadays so its just components that wear. As long as you keep on top of things a car will last years and years. And that's as free or as cheap as motoring can get in my mind.
I can see why people want a new car and I think its just for the same reason as they want a new iPhone.
This is almost certainly true, however I would add one caveat and that is annual mileage. As a general rule new/newer cars are likely to be more reliable (purely on the basis of wear and tear failure on the components you mention) and as such a high mileage driver can often be compromised with an older car.
For me personally, I drive a Company car so a bit easier for me, but when I eventually retire (not too long I hope) I will buy a new retirement car and intend to keep it for years and years as my mileage is likely to be minimal and the impact of breakdown less critical.
If you can afford a permanent motoring budget of £200/£300 a month but will never be able to save £20k+ cash to buy outright, the benefits of outright ownership are not compelling.
I want to in particular pick up on this point, as to me buying on lease will likely mean that yes, you'll never have £20k cash to buy as you're for ever getting now and paying for it later without building any equity.
As an example;
Taking an example 3 year lease for an Audi A3 hatch in 2019;
Down payment of £3,000 (inc fee's)
Monthly payment of £310
So 3 year cost = £14,160. It's now 2022 and you have nothing, cars gone back and you need to find another £3k for down payment on the next car and so the cycle continues.
Purchase;
On the basis you have the £3k deposit to lease, £310 a month loan payment (3 years) is circa £10,000.
So that gives you £13,000 to buy a car, which would just about get you into a sub 3 year old A3 (same car as the lease but obviously older).
After 3 years you'd likely get back £8k or a little bit more. So you've spent the same amount as if leasing but you have £8k still.
So this time you only need to borrow £5k for the 13k car which is under £150 a month meaning you can save £150, you also don't need to find another deposit.
End of that 3 year cycle you have a car worth £8k and £5,400 banked (£150 x 36) meaning the next 3 year cycle you don't need to borrow anything, nor find another 3k deposit....... you can either continue to save what would be the lease amount of £300 meaning after 3 years you'll have almost £20k in savings and asset in a car or go blow out on a better/newer car.
In essence, 3 x 3 year lease deals to drive a new A3 will cost you in excess of £42k.
a 3 x 3 year loan/purchase of a 3 year old A3 will cost you;
Cycle 1 1 £14,160 (£3k deposit and £310 a month)
Cycle 2 £5,400 (£150 a month)
Cycle 3 £5,400 (assuming you didn't bother saving the additional £150 a month)
Total £24,960 AND you still have a car worth minimum £8k, so net £16,960.
£42k+ v less than £17k. That's the reality of buying new on a lease when you can't really afford it, £25k difference over 9 years. Yes there are likely a few additional costs in not buying new, but very little in the scheme of things.
Isn't that £25k saving just the depreciation you have saved (multiplied by 3) by not having 3 brand new cars versus owning one car for years 4-12 of its life?
And the cons of buying in that scenario are you don't stay at cutting edge of tech and safety and will have to pay out more in parts and servicing costs than you would going down the 3x3yr lease route
Isn't that £25k saving just the depreciation you have saved (multiplied by 3) by not having 3 brand new cars versus owning one car for years 4-12 of its life?
And the cons of buying in that scenario are you don't stay at cutting edge of tech and safety and will have to pay out more in parts and servicing costs than you would going down the 3x3yr lease route
The lease cost/difference is more than just depreciation (manufacturers want to make a profit as well!) but a large part will be like any new car, drive it away and you lose 20%+ by day 2.
In my experience bar a £30 MOT every year there is little in it running costs wise.
Cutting edge technology...... very little difference technology/safety wise in a 3 year old A3 compared to a new one.
There's nothing wrong with leasing, but understand the cost, If you're happy to pay that simply to drive a new car that's up to the individual.
I've only (outside of company car) bought one brand new car, that was in 2003, the company at that time had a 35% staff discount on Vauxhalls so bought my wife a Zafira for less than a 18month/2 year old one.
I also ought to declare I'm probably slightly biased, I've probably traded over 500 cars so am able to lean on my experience and contacts to buy below market value second hand cars.
If you can afford a permanent motoring budget of £200/£300 a month but will never be able to save £20k+ cash to buy outright, the benefits of outright ownership are not compelling.
I want to in particular pick up on this point, as to me buying on lease will likely mean that yes, you'll never have £20k cash to buy as you're for ever getting now and paying for it later without building any equity.
As an example;
Taking an example 3 year lease for an Audi A3 hatch in 2019;
Down payment of £3,000 (inc fee's)
Monthly payment of £310
So 3 year cost = £14,160. It's now 2022 and you have nothing, cars gone back and you need to find another £3k for down payment on the next car and so the cycle continues.
Purchase;
On the basis you have the £3k deposit to lease, £310 a month loan payment (3 years) is circa £10,000.
So that gives you £13,000 to buy a car, which would just about get you into a sub 3 year old A3 (same car as the lease but obviously older).
After 3 years you'd likely get back £8k or a little bit more. So you've spent the same amount as if leasing but you have £8k still.
So this time you only need to borrow £5k for the 13k car which is under £150 a month meaning you can save £150, you also don't need to find another deposit.
End of that 3 year cycle you have a car worth £8k and £5,400 banked (£150 x 36) meaning the next 3 year cycle you don't need to borrow anything, nor find another 3k deposit....... you can either continue to save what would be the lease amount of £300 meaning after 3 years you'll have almost £20k in savings and asset in a car or go blow out on a better/newer car.
In essence, 3 x 3 year lease deals to drive a new A3 will cost you in excess of £42k.
a 3 x 3 year loan/purchase of a 3 year old A3 will cost you;
Cycle 1 1 £14,160 (£3k deposit and £310 a month)
Cycle 2 £5,400 (£150 a month)
Cycle 3 £5,400 (assuming you didn't bother saving the additional £150 a month)
Total £24,960 AND you still have a car worth minimum £8k, so net £16,960.
£42k+ v less than £17k. That's the reality of buying new on a lease when you can't really afford it, £25k difference over 9 years. Yes there are likely a few additional costs in not buying new, but very little in the scheme of things.
Can't argue that buying a used 3 year old car with a loan and recycling is cheaper than leasing a brand new car.
You are highlighting that the depreciation cost has the most impact on total costs rather than how leasing enables you to afford to drive a new car today if your monthly budget allows, rather than buying in ten years time.
If we all looked back and worked out how much we've wasted on credit card interest because we wanted stuff now, no one would have credit card, nor would anyone lease a car.
As I said, all shades of grey, not black and white.
I’m soon to be 47, have had credit cards since 19, only once paid interest (of about £5) when I forgot to pay the bill. Credit cards can make you money, no one should be paying interest on them.
With 0% cards I’ve probably made in excess of £20k from them (plus maybe 3-4K on cash back) over the years, although a large part of that was a fair few years back when interest rates on savings were half decent.
I’m soon to be 47, have had credit cards since 19, only once paid interest (of about £5) when I forgot to pay the bill. Credit cards can make you money, no one should be paying interest on them.
With 0% cards I’ve probably made in excess of £20k from them (plus maybe 3-4K on cash back) over the years, although a large part of that was a fair few years back when interest rates on savings were half decent.
Like you, can't remember the last time I paid interest and I only use them now for Section 75 protection, cash back and/or membership points or air miles (and holds on hire cars or hotels).
I am, like you, relatively fortunate - most people rely (rightly or wrongly, but essentially) on using them to spread costs. For the prime cards that's not really a major issue if it's single figure percentage interest and the balance is paid off in a few months - the sub-prime ones are another story.
@Dippenhall I knew someone was going to pull apart what I said
My point is, if money is that tight that buying a brand new car on the never never is an option you feel is your only one I'm saying it is not.
For the last decade at least you can get amazing value from used cars. I'm not talking about a 2 year old Mercedes. A 10 year old BMW, Audi, VW will see you right you just need to pick one that has been looked after. Plenty of easy giveaway signs of that which aren't secrets and I'd be happy to share with anyone who asked me.
Horses for courses but I don't like PCP, leasing or HP for private vehicles. Totally get it for businesses and tax write offs but not for the average Joe. I'm not cash rich, if I no longer want or need a car I sell it. Put it on auto trader or Ebay and away it goes. Selling on to a dealer is the most unappealing option financially and I've only ever done it once to chop in an absolute dog of a car I planned on scrapping anyway.
Thanks to everyone for their advice, I've decided to buy a car. Looking at autotrader and ebay. Got about £7.5k cash, don't want anything older than 2014. Might get a Ford Focus, dull but reliable. Needs to be a hatchback style'ish. ie nothing small.
What are peoples thoughts on buying CAT S & N cars? I didn't even know that was a thing until today.
If anyone have any further advice it would be appreciated.
If you can afford a permanent motoring budget of £200/£300 a month but will never be able to save £20k+ cash to buy outright, the benefits of outright ownership are not compelling.
I want to in particular pick up on this point, as to me buying on lease will likely mean that yes, you'll never have £20k cash to buy as you're for ever getting now and paying for it later without building any equity.
As an example;
Taking an example 3 year lease for an Audi A3 hatch in 2019;
Down payment of £3,000 (inc fee's)
Monthly payment of £310
So 3 year cost = £14,160. It's now 2022 and you have nothing, cars gone back and you need to find another £3k for down payment on the next car and so the cycle continues.
Purchase;
On the basis you have the £3k deposit to lease, £310 a month loan payment (3 years) is circa £10,000.
So that gives you £13,000 to buy a car, which would just about get you into a sub 3 year old A3 (same car as the lease but obviously older).
After 3 years you'd likely get back £8k or a little bit more. So you've spent the same amount as if leasing but you have £8k still.
So this time you only need to borrow £5k for the 13k car which is under £150 a month meaning you can save £150, you also don't need to find another deposit.
End of that 3 year cycle you have a car worth £8k and £5,400 banked (£150 x 36) meaning the next 3 year cycle you don't need to borrow anything, nor find another 3k deposit....... you can either continue to save what would be the lease amount of £300 meaning after 3 years you'll have almost £20k in savings and asset in a car or go blow out on a better/newer car.
In essence, 3 x 3 year lease deals to drive a new A3 will cost you in excess of £42k.
a 3 x 3 year loan/purchase of a 3 year old A3 will cost you;
Cycle 1 1 £14,160 (£3k deposit and £310 a month)
Cycle 2 £5,400 (£150 a month)
Cycle 3 £5,400 (assuming you didn't bother saving the additional £150 a month)
Total £24,960 AND you still have a car worth minimum £8k, so net £16,960.
£42k+ v less than £17k. That's the reality of buying new on a lease when you can't really afford it, £25k difference over 9 years. Yes there are likely a few additional costs in not buying new, but very little in the scheme of things.
All I deduce from that is that some people have far too much time on their hands.....
Thanks to everyone for their advice, I've decided to buy a car. Looking at autotrader and ebay. Got about £7.5k cash, don't want anything older than 2014. Might get a Ford Focus, dull but reliable. Needs to be a hatchback style'ish. ie nothing small.
What are peoples thoughts on buying CAT S & N cars? I didn't even know that was a thing until today.
If anyone have any further advice it would be appreciated.
Don't buy an insurance write off mate, a lot of the time there is nothing wrong with them after repair but you will struggle to sell it and it will negatively affect your insurance premium. From the parameters you have given me I had a quick search of ebay. I'm pretty sure they have got the price wrong but if not, buy this
Thanks to everyone for their advice, I've decided to buy a car. Looking at autotrader and ebay. Got about £7.5k cash, don't want anything older than 2014. Might get a Ford Focus, dull but reliable. Needs to be a hatchback style'ish. ie nothing small.
What are peoples thoughts on buying CAT S & N cars? I didn't even know that was a thing until today.
If anyone have any further advice it would be appreciated.
Don't buy a CAT car, resale is soo much harder.
£7,500 will get you something decent. Nothing in at the moment but keep an eye here or give Tim a call;
If you can afford a permanent motoring budget of £200/£300 a month but will never be able to save £20k+ cash to buy outright, the benefits of outright ownership are not compelling.
I want to in particular pick up on this point, as to me buying on lease will likely mean that yes, you'll never have £20k cash to buy as you're for ever getting now and paying for it later without building any equity.
As an example;
Taking an example 3 year lease for an Audi A3 hatch in 2019;
Down payment of £3,000 (inc fee's)
Monthly payment of £310
So 3 year cost = £14,160. It's now 2022 and you have nothing, cars gone back and you need to find another £3k for down payment on the next car and so the cycle continues.
Purchase;
On the basis you have the £3k deposit to lease, £310 a month loan payment (3 years) is circa £10,000.
So that gives you £13,000 to buy a car, which would just about get you into a sub 3 year old A3 (same car as the lease but obviously older).
After 3 years you'd likely get back £8k or a little bit more. So you've spent the same amount as if leasing but you have £8k still.
So this time you only need to borrow £5k for the 13k car which is under £150 a month meaning you can save £150, you also don't need to find another deposit.
End of that 3 year cycle you have a car worth £8k and £5,400 banked (£150 x 36) meaning the next 3 year cycle you don't need to borrow anything, nor find another 3k deposit....... you can either continue to save what would be the lease amount of £300 meaning after 3 years you'll have almost £20k in savings and asset in a car or go blow out on a better/newer car.
In essence, 3 x 3 year lease deals to drive a new A3 will cost you in excess of £42k.
a 3 x 3 year loan/purchase of a 3 year old A3 will cost you;
Cycle 1 1 £14,160 (£3k deposit and £310 a month)
Cycle 2 £5,400 (£150 a month)
Cycle 3 £5,400 (assuming you didn't bother saving the additional £150 a month)
Total £24,960 AND you still have a car worth minimum £8k, so net £16,960.
£42k+ v less than £17k. That's the reality of buying new on a lease when you can't really afford it, £25k difference over 9 years. Yes there are likely a few additional costs in not buying new, but very little in the scheme of things.
All I deduce from that is that some people have far too much time on their hands.....
Thanks to everyone for their advice, I've decided to buy a car. Looking at autotrader and ebay. Got about £7.5k cash, don't want anything older than 2014. Might get a Ford Focus, dull but reliable. Needs to be a hatchback style'ish. ie nothing small.
What are peoples thoughts on buying CAT S & N cars? I didn't even know that was a thing until today.
If anyone have any further advice it would be appreciated.
Don't buy an insurance write off mate, a lot of the time there is nothing wrong with them after repair but you will struggle to sell it and it will negatively affect your insurance premium. From the parameters you have given me I had a quick search of ebay. I'm pretty sure they have got the price wrong but if not, buy this
Look's like a nice motor, but its an auto and a little older than I'd like to buy. Thanks for the advice, is there anything I should look out for when buying off eBay?
Comments
£12 charge is it, to drive inside the S Circular if your vehicle isn't acceptable ?
I got rid of my diesel this week, because of this.
It would cost £300pa just to go to Charlton.
Even though I flatly declined, he still tried again when I went to collect the car.
ULEZ will be a bit of a bugger.
All the value is in the nearly new used car market. I can't see the point, genuinely of leasing or doing pcp, hp etc for a vehicle. As has been said, if you don't have the cash or don't want to lay out the full price then bank loans are the best way to go and for gods sake don't secure them against the car.
You can pick up some very very decent cars now for relative peanuts and certainly compared to their list price brand new
Have a scan at some of the big retailers if you can't be bothered to look through auto trader or ebay. Ebay I have got some very decent cars from and sold a lot on.
BMW 5 series are excellent used value, fiat 500s are ridiculously cheap at the smaller end, and generally the ex fleet repmobiles such as c class mercedes, Audi A4, Mondeos, Passats etc are all decently made and will last for ages if looked after and I mean staying on top of services and not waiting until you leave a Hiroshima cloud down the road when starting it.
I cannot get my head round paying anything like 200/300 sheets a month for something unspectacular that you realistically wont own, and if you do you have paid top dollar for a much depreciated item. Horses for courses though, I prefer paying cash for a decent used car, either prefer being tied to a 3 year deal for a monthly commitment before servicing, fuel, tax, maintenance and MOTs
It also appears to be a revenue exercise - why are the most polluting diesels still allowed to enter the zone if they pay a fee?
i have an old Lotus Elise, currently would fall foul as the Co2 etc is not recorded on the log book. Fortunately I can pay £180 fee to Lotus for a certificate that confirms it’s exempt.
If people do a negligible mileage within the zone it seems ludicrous to force them to replace or scrap a perfectly serviceable vehicle. It seems to be adding to the problem?
"...if you don't have the cash or don't want to lay out the full price then bank loans are the best way to go"
"I cannot get my head round paying anything like 200/300 sheets a month for something unspectacular that you realistically won't own"
If you don't have the cash then the interest you pay on a bank loan is directly comparable to the interest you pay under a lease/pcp deal. The interest rate on a pcp deal is subsidised by the manufacturer and you might get a 0% interest deal.
Would you get a mortgage on a house that cost £300k and was worth £200k the next day and the monthly servicing costs was higher than the cost of living in the house for a rent? Would you want to pay back £300k plus interest to own an asset worth £150k after 3 years and falling. In any other context, the idea of embracing negative equity would be seen as madness.
With pcp you own the vehicle, you just can't dispose of it without incurring charges. Taking out a bank loan to purchase the car means you pay interest on the same capital as under pcp, but you also have to repay the capital. Under pcp you make no capital re-payments unless you pay the voluntary balloon payment.
The utility benefits of a car are the same whether you own it or lease it. The practical benefit of outright ownership (of a new car) is accessible only to those who have the cash to buy outright, that is
- freedom to decide when you sell your car and to whom;
- not being forced to renew your vehicle every 3 or 4 years, and
- not being tied to a monthly outlay after the loan has been serviced.
- owning scrap metal with a diminishing resale utility value
If you can afford a permanent motoring budget of £200/£300 a month but will never be able to save £20k+ cash to buy outright, the benefits of outright ownership are not compelling.
A car is a utility, not an investment, and the funding of the cost to acquire that utility will vary according to very individual circumstances.
Knocking leasing/pcp when you have the means to purchase outright is not being objective. Like most things, the wealthier you are the more you can reduce the cost of acquiring services and products and buying outright simply means paying less by avoiding interest on someone else's capital.
But it also denies the presence of opportunity cost where a financial reward can be obtained by leasing a depreciating asset and applying your free capital in a growth asset generating value greater than the metal you paid to drive around in and gave back after 3 years. So even wealthy people might choose to lease rather than buy if they can make better use of their capital.
It is not black and white, it's every shade in between.
As you say," an old car dealer explained to me when I needed to get rid of a car". I've never met one who will give you good news when your selling and when your buying the opposite tends to be true. Heads they win and tails you lose. They are there for their business not the customer. The fact is there are plenty of people walking around with 10k in their pocket and most probably in your very street, you don't need to find them, that's the dealers job. If the people with cash 2nd hand car dealers wouldn't exist.
In my opinion the best option is to buy what you can afford and keep it in a good state of repair. Cars don't, generally speaking, rust away nowadays so its just components that wear. As long as you keep on top of things a car will last years and years. And that's as free or as cheap as motoring can get in my mind.
I can see why people want a new car and I think its just for the same reason as they want a new iPhone.
This is almost certainly true, however I would add one caveat and that is annual mileage. As a general rule new/newer cars are likely to be more reliable (purely on the basis of wear and tear failure on the components you mention) and as such a high mileage driver can often be compromised with an older car.
For me personally, I drive a Company car so a bit easier for me, but when I eventually retire (not too long I hope) I will buy a new retirement car and intend to keep it for years and years as my mileage is likely to be minimal and the impact of breakdown less critical.
I want to in particular pick up on this point, as to me buying on lease will likely mean that yes, you'll never have £20k cash to buy as you're for ever getting now and paying for it later without building any equity.
As an example;
Taking an example 3 year lease for an Audi A3 hatch in 2019;
Down payment of £3,000 (inc fee's)
Monthly payment of £310
So 3 year cost = £14,160. It's now 2022 and you have nothing, cars gone back and you need to find another £3k for down payment on the next car and so the cycle continues.
Purchase;
On the basis you have the £3k deposit to lease, £310 a month loan payment (3 years) is circa £10,000.
So that gives you £13,000 to buy a car, which would just about get you into a sub 3 year old A3 (same car as the lease but obviously older).
After 3 years you'd likely get back £8k or a little bit more. So you've spent the same amount as if leasing but you have £8k still.
So this time you only need to borrow £5k for the 13k car which is under £150 a month meaning you can save £150, you also don't need to find another deposit.
End of that 3 year cycle you have a car worth £8k and £5,400 banked (£150 x 36) meaning the next 3 year cycle you don't need to borrow anything, nor find another 3k deposit....... you can either continue to save what would be the lease amount of £300 meaning after 3 years you'll have almost £20k in savings and asset in a car or go blow out on a better/newer car.
In essence, 3 x 3 year lease deals to drive a new A3 will cost you in excess of £42k.
a 3 x 3 year loan/purchase of a 3 year old A3 will cost you;
Cycle 1 1 £14,160 (£3k deposit and £310 a month)
Cycle 2 £5,400 (£150 a month)
Cycle 3 £5,400 (assuming you didn't bother saving the additional £150 a month)
Total £24,960 AND you still have a car worth minimum £8k, so net £16,960.
£42k+ v less than £17k. That's the reality of buying new on a lease when you can't really afford it, £25k difference over 9 years. Yes there are likely a few additional costs in not buying new, but very little in the scheme of things.
Isn't that £25k saving just the depreciation you have saved (multiplied by 3) by not having 3 brand new cars versus owning one car for years 4-12 of its life?
And the cons of buying in that scenario are you don't stay at cutting edge of tech and safety and will have to pay out more in parts and servicing costs than you would going down the 3x3yr lease route
The lease cost/difference is more than just depreciation (manufacturers want to make a profit as well!) but a large part will be like any new car, drive it away and you lose 20%+ by day 2.
In my experience bar a £30 MOT every year there is little in it running costs wise.
Cutting edge technology...... very little difference technology/safety wise in a 3 year old A3 compared to a new one.
There's nothing wrong with leasing, but understand the cost, If you're happy to pay that simply to drive a new car that's up to the individual.
I've only (outside of company car) bought one brand new car, that was in 2003, the company at that time had a 35% staff discount on Vauxhalls so bought my wife a Zafira for less than a 18month/2 year old one.
I also ought to declare I'm probably slightly biased, I've probably traded over 500 cars so am able to lean on my experience and contacts to buy below market value second hand cars.
You are highlighting that the depreciation cost has the most impact on total costs rather than how leasing enables you to afford to drive a new car today if your monthly budget allows, rather than buying in ten years time.
If we all looked back and worked out how much we've wasted on credit card interest because we wanted stuff now, no one would have credit card, nor would anyone lease a car.
As I said, all shades of grey, not black and white.
With 0% cards I’ve probably made in excess of £20k from them (plus maybe 3-4K on cash back) over the years, although a large part of that was a fair few years back when interest rates on savings were half decent.
Like you, can't remember the last time I paid interest and I only use them now for Section 75 protection, cash back and/or membership points or air miles (and holds on hire cars or hotels).
I am, like you, relatively fortunate - most people rely (rightly or wrongly, but essentially) on using them to spread costs. For the prime cards that's not really a major issue if it's single figure percentage interest and the balance is paid off in a few months - the sub-prime ones are another story.
My point is, if money is that tight that buying a brand new car on the never never is an option you feel is your only one I'm saying it is not.
For the last decade at least you can get amazing value from used cars. I'm not talking about a 2 year old Mercedes. A 10 year old BMW, Audi, VW will see you right you just need to pick one that has been looked after. Plenty of easy giveaway signs of that which aren't secrets and I'd be happy to share with anyone who asked me.
Horses for courses but I don't like PCP, leasing or HP for private vehicles. Totally get it for businesses and tax write offs but not for the average Joe. I'm not cash rich, if I no longer want or need a car I sell it. Put it on auto trader or Ebay and away it goes. Selling on to a dealer is the most unappealing option financially and I've only ever done it once to chop in an absolute dog of a car I planned on scrapping anyway.
What are peoples thoughts on buying CAT S & N cars? I didn't even know that was a thing until today.
If anyone have any further advice it would be appreciated.
https://rover.ebay.com/rover/0/0/0?mpre=https://www.ebay.co.uk/ulk/itm/173966380395
https://auctionview.british-car-auctions.co.uk/Buyer/FacetedSearch/SaleCatalogue
I completely agree that the mobility vehicles are bargains though
£7,500 will get you something decent. Nothing in at the moment but keep an eye here or give Tim a call;
https://www.kingshillgarage.co.uk/used-cars
Always have time when it comes to money
Cheers, I've signed up for this now.