seems to be the norm now but to me appears utterly daft beyond belief

1) you never own a car, your effectively paying to rent a car, probably covering the deprecation for that car that someone else will then sell on once you've had a shot.

2) you have to pay for their car getting serviced at the dealers

3) restrictions on mileages and penalties for going over it

For someone who buys second hand cars and pays feck all for them and services them myself what the hell is going on here??? have people gone completely mad??

I'm under the assumption that since it seems all manufactures are peddling these deals it's just a way of screwing their customers out of even more money...

Agree 100%

Have you tried walking into a dealers and saying you want to pay cash...they look at you as if you are from another planet I think even the sales guys are brainwashed into these deals as being 'a good thing' when they are nothing of the sort unless you are the finance company funding it all. Land Rover garage tried to tell me these deals are better with my money in the bank earning interest. Do they not think I can do the maths and quickly realise they are costing a fortune long term

Mobile phones are the same. I can pay £25 a month for 24 months for phone 'y' and get x amount of data/minutes/txt per month....or 10 minutes research and I can pay £150 for a new, unlocked phone (often direct from Samsung, Sony etc) plus £10 a month for a SIM only deal that has the same if not better data/minutes/txt

I was taught from a young age that if I can't afford to pay for it now I can't have it, simple. If I want it work hard and save the money for it. A large amount of society thinks living in debt is OK. Only thing I borrow for is my house and I am paying that off as quickly as i can.

yeah I was brought up to save for things too and debt was a bad thing...end of

Agree with you Whippy - it's never made sense to me either.

I prefer to pay less money for a 2nd (or more) hand car and service it myself. Paying rent and depreciation on a car you'll have to give back seems daft to me.

I can only see it as the dealers geting you hooked - you start on the process and when it comes time to return the car most customers simply carry on with another one.

As peter030371 the only debt for me is a mortgage and I'm making every effort to get that paid off ASAP. The thought of living in debt for anything else would make me feel very uncomfortable.

If you don't have the money you don't have the things, but at least you're not under a debt trap!

Im with you i dont think i would ever do it but i know some people who get a option of basic company car or a car allowance through there work taking the car allowance could get you a better car, Some jobs they will require a car no older than x years too so if you brought a new car every 3 years you would loose a huge amount.

Just waiting for the claims of miss-selling - "I didn't know what I was getting into" - and demands for compensation.

I can't think anyone I know who would have a company car, all that died out here years ago

quote:

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Originally posted by Mr Whippy
I can't think anyone I know who would have a company car, all that died out here years ago

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1)Curb appeal, or keeping up with Jones's.
2)No servicing , no repairs probably won't even need tyres.
3)No Mot if you have a new one every three years.

If a car is just a tool to get from a to b and your not a petrol head and you would like something nicer than you could buy out right then it can make sense.

Me on the other hand, i would sooner own several bangers at once.

It can be pretty good for a small business. A customer of mine (a 2 person operation) for years ran a medium old banger of a transit, broke down occasionally and then had a big break down or two, - so they had the issue of the van being off the road, unplanned expenditure of a couple of K and the faff of getting hire vans.
So they ditched it for a new one on lease, all service, breakdown, courtesy vehicle included - they paid a fixed amount every month and got on with running their business. - Knowing them personally I can tell you that their stress level dropped considerably!

I know plenty of folks who are happy to get a new car every three years and just think of the payments as another monthly outgoing. At the end of three years, there's no balloon payment as they just choose another car and carry on with the payments. They know what the car is going to cost them each month and if there's a problem, they get another car. I can see the appeal especially if you're not in a position to maintain your own vehicles and if I had enough spare cash, I could be tempted even if it was just for reassurance that I won't get the phone call from SWMBO telling my the car has shat it's gearbox all over the road, or the air con is spitting gravy at the kids, or whatever other faults she inflicts on my cars.....

In Mexico there are Tax advantages as rent is fully deductible (?) and purchases are not.
That is, if you rent a car, you won´t be paying 30% ON TOP of what thee monthly bill is.
That is enough incentive to go leasing.
You may pay 12% more, but that gives a net 18 % on the black...
Or so I was told...

This is the wrong place to get a opposite opinion on this. It is Locostbuilder.co.uk. Clue is in the title. Lots of people at my work have leased cars. More and more are looking at it.

1. New Car. Some people believe 'new' means better by default.
2. Getting your car serviced and MOT'd is a hassle
3. No thinking required.
4. Absolute known monthly cost, no surprises, even if it costs more.

Mother - in - law is getting a leased car after her clutch went in her Golf at 90k. £1k plus repair because she has taken it to the main dealer because she 'doesn't trust street mechanics'. Rather than demand a courtesy vehicle she turned around walked down the street and into Avis and hired a car for the week at £195. Over the road is 'thifty car hire'. Half the price for a similar car. She didn't go in there because 'thifty' sounds cheap and unsafe.

I drive a battered Peogeot Partner van and I will never lease a vehicle.

I think it's mental as well but each to their own.

Brother has a BMW X4 XDrive M Sport whatever on this PCP deal.

He's paying £500 A MONTH for it (though I think it's a near £50K car).....

If that's not bonkers enough. He has a company van and his other half works about a mile away from home !!!!

I guess it's a way of driving a car you have no hope of actually buying for cash but why you'd do it is a bit beyond me.

Steve

I've had company cars in the past. Never had the option of an allowance instead though.

The company stipulated the cars had to be 4 door diesels (not really a worry for me). It's fair to say that having a brand new car was very nice. Not having to worry about service costs was good too.

The thing that got me in the end was the ever increasing personal tax sting the cars brought with them. This encouraged me from a rather perky MK1 Seat Leon Cupra TDI through a Passat 2.0 TDI S then to a Volvo V50 1.6D Drive in an effort to minimise the personal tax cost.

The company folded in 2011 and since then it's been buy/run your own car. I went back to a Passat 2.0 TDI SE of the same age as the one I'd had before. Didn't cost too much to buy or run and did me just fine. Serviced it myself to further control costs.

Already said it above, but getting trapped in a personal car lease has never appealed to me and I can't see it ever being so.

Since 2014 epilepsy's stopped me driving altogether. A bummer, but it's reminded me that you can get about just fine (where I live) by public transport and walking.

[Edited on 25/7/18 by nick205]

quote:

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Originally posted by nick205...7
Since 2014 epilepsy's stopped me driving altogether. A bummer, but it's reminded me that you can get about just fine (where I live) by public transport and walking.

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As soon as the company car landscape changed a few years ago and the option of a car allowance came up I took it. Prior to that I had a company Prius which was very tax efficient - effectively a free company car like it used to be in the old days.

When I took the car allowance I bought a low mileage 3yr old Mondeo and kept it for 4 years. In that 4 years it cost me [including buying it, insurance, servicing, tyres etc - all in] about 2.5 years car allowance after offsetting company mileage against tax.

The big plus for me of owning a car is if you get made redundant, when you really need a car that isn't costing you, you have one.

The other big plus is the time saved by NOT having a dealer involved in servicing it or having to use a specific tyre supplier.

The money I saved paid for my MK

[Edited on 24/7/18 by SJ]

Nothing wrong with leasing in my opinion. If you want a brand new car, do low miles, and change every 2 years then it's the best way to do it.

Having said that, I've not done it, nor do I plan to, but that's only because I don't use a car daily.

It makes zero financial sense to buy a car with cash outright at the moment when borrowing is so cheap. Money is far better off in your own bank, rather than someone else's!


2nd hand cars dont count, as you can't compare a new car with a 2nd hand one. It's apples and oranges

Actually, most of the comments are really new car vs 2nd hand, but....

IF you are the type of person that likes a new every couple of years it can make sense to lease. if you do it well, the cost of the lease purchase is only a little more than what you would loose in depreciation. Return them at the end of the term and take out another, you'll never own the car, but you'll always have a new, warrantied and (in theory) a dependable car

I was in a slightly unusual position as I used to get a good discount as my dad worked for Ford, a 1.25 fiesta Zetec worked out at about £125 a month for three years (no deposit), hand it back at the end or pay something like £4.5K to keep it. In reality, you chop it in and get another for the same monthly's. I talked them in to 3 free service's. No Mot's required and possibly not even needing any tyres in those years as that car only does about 10K a year
It's perfect for me who works funny hours to know that there's a good reliably car for my wife & kids, that's under warranty and will never get older than 3 years
I negotiated a good deal, with my Dad's discount probably saving about £3.5K off the list price

I also did the same for about 12 years with a car allowance in lieu of a company car, my company specified that the car had to be 4/5 door diesel and always less than 4 years old. It worked out that I made money on that deal

In both cases it worked for me as I got 15 - 25% discount through my Dad. Ford also do a lot of 0% finance deals and renewal bonuses which helps too



[Edited on 24/7/18 by Toys2]

quote:

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It makes zero financial sense to buy a car with cash outright at the moment when borrowing is so cheap. Money is far better off in your own bank, rather than someone else's!

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We lease one (2017 Qashqai) and own one (2016 A6 Allroad) so I'm on both sides of the fence.

Mrs has a car allowance, and wanted a Qashqai, so I did the sums...

List Price was 26k, so I could buy one, and take an (estimated) 13 - 15k hit on depreciation over 3 years, or lease one, which over 3 years would cost me £9k, tax, breakdown and maintenance included, then hand it back, no hassle of selling or questions asked!!

No brainer from where I'm sat.

On the other side... Me... I'll run the Allroad into the ground, maintaining it myself until it becomes ineffective to do so. My circumstances, mileage and the type of car means that leasing would cost me in excess of £700 p/m. while owning it costs me roughly £300.

Again, a no brainer.

[Edited on 24/7/18 by tomduffield13]

I do it. If you want a new car but don't want to outlay the cash. All the folks who yelp about paying cash and no debt etc really don't understand it.

For starters leasing (pch) and personal contract purchase ( pcp) are 2 totally different things. I would not touch a pcp ever as your basically tied in to get a new car from a certain dealer.

I get a new car every 2 years. I shop around for the best offers at the time and don't get fixated on any particular car. I've had a focus diesel. A fiesta St and a golf gti. All the lease rates on these have been well under the market depreciation if I'd have bought. I've never had to buy a tyre, tax or anything other than a cheap first service. I'm a car enthusiast but have no real desire to maintain a banger. I have my projects for tinkering.

I could go out and buy a new car but id rather keep my savings where they are and let someone else take the financial hit of buying. And after the 2 years I walk away into something else or I go back to an older car.

A mate who's so far into a pcp he can barely see daylight on the exact same golf as me can't believe the cost difference between him and me. And at the end of his contract he will have no equity just like me.

quote:

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Originally posted by Angel Acevedo

quote:

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Originally posted by nick205...7
Since 2014 epilepsy's stopped me driving altogether. A bummer, but it's reminded me that you can get about just fine (where I live) by public transport and walking.

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Maybe even better...
As walking regularly will improve your overall health...

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Rent depreciating assets, buy appreciating assets - if your after a new car good route to go down. Personally I buy second hand and then drive it to the ground.

Some odd posts.

Savings earn LESS interest than the cost of borrowing or the financial industry would go bust. £30k in the bank will earn less interest than the cost of borrowing £30k to buy a car. Money is cheap at the moment but its still not free.

Fundamentally you cannot lease (in any way or form, PCP, HP etc) a car for less than the deprecation or the finance/car companies will lose money which is not a viable business! In comparing lease costs with buying a new car you have to factor in that sizable discounts are available for a cash purchase. If you think you have a good lease deal then a better cash deal is possible. Play hard ball and they drop the price like a lead balloon. I got 10% off a new Mini when they started out saying 'no discount is possible due to high demand', just wait until they have a sales target to hit

People buy cars on a lease so they can have a nice new car with all the toys without having to save for years to afford it. There is no financial gain in doing it that way, the car company gets your money quicker and more of it at the end of the day.

quote:

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Originally posted by peter030371
Some odd posts.

Savings earn LESS interest than the cost of borrowing or the financial industry would go bust. £30k in the bank will earn less interest than the cost of borrowing £30k to buy a car. Money is cheap at the moment but its still not free.

Fundamentally you cannot lease (in any way or form, PCP, HP etc) a car for less than the deprecation or the finance/car companies will lose money which is not a viable business! In comparing lease costs with buying a new car you have to factor in that sizable discounts are available for a cash purchase. If you think you have a good lease deal then a better cash deal is possible. Play hard ball and they drop the price like a lead balloon. I got 10% off a new Mini when they started out saying 'no discount is possible due to high demand', just wait until they have a sales target to hit

People buy cars on a lease so they can have a nice new car with all the toys without having to save for years to afford it. There is no financial gain in doing it that way, the car company gets your money quicker and more of it at the end of the day.

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interesting replies for sure

read my original post properly, sneering I'm not

I'm actually thinking seriously on buying a new Fiesta for myself (Titanium 1.0 5 door) as I really like them and know I will keep it a very long time but would like to start with a perfect example in the beginning (my £300 one although a good buy at 60k miles has rust on the underside that will eventually kill it regardless of what I do). I've been looking at the various ways of financing it and the lease option seems to make no sense at all unless I was just interested in getting new cars every few years and willing to fork out the extra but is nothing about saving money.

You never once stated any of that in your original post. I read it thoroughly the first time.

In your case yes I agree. A long term purchase does not warrant any form of contract hire/purchase. Buy outright or if any lending needed a bank loan is the best option as car hp is silly Apr as they want you on a pcp.

I have notice over the years some folk are completely mental with cars, I don't know what it is other than putting up appearances maybe because it's one of the most visible things other people see and judge others by since not many people see where someone lives but do see what they drive.

Two examples recently was the guy I worked next to, always in debt (actually getting chased by debt collectors and banks), not a penny to his name, always in overdraft, borrowing money from friends yet was obsessed with owning a large Merc saloon which he couldn't even afford to put petrol in, it actually ran out of fuel when I was in it and we had to walk back to the office to get my car to get petrol! Hilariously every time he sold one to get another he always got shafted by being stupid and lost thousands, what a numpty

The other one sold their house to build a new one but then found out he couldn't get a mortgage to build it so had to buy a parkhome for this family to live in on the building site (spent almost all the money from their old small house to renovate it) got no saving and no budget to progress...so what does he do? leases a new series 1 BMW wtf really would have been at the very very bottom of my list of priorities that one...

I'll ever understand some people

quote:

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Originally posted by sdh2903
You never once stated any of that in your original post. I read it thoroughly the first time.

In your case yes I agree. A long term purchase does not warrant any form of contract hire/purchase. Buy outright or if any lending needed a bank loan is the best option as car hp is silly Apr as they want you on a pcp.

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I do both.. lease a £50k Merc for a lot less than it would cost me to buy, run, loose in depreciation and sell on. Finite cost at the end of each month, everything included insurance, tax, breakdown servicing tyres, concierge service etc. Absolutely no surprises.

Swmbos car is owned. 12-18 months old when buying, someone else taking the hit. Current low mileage 65 reg Civic bought late last year for £12.5k cash. (£25k new.) Still worth £12k al, day long will sell when 4-5 years and do the same again. Won’t lease for swmbo, cost too much to repair it when returning it.

Pro’s and cons for both. Suits me. As previously said, some misinformed posts going on here as usual.

I got my Hayabusa on PCP. No way I could afford £10,695 up front but £3000 down and £57/month is a no brainer in my book. Yep, there's a £6000 balloon at the end, but as I paid over a grand less than list price I ain't worried about interest. Saying that, I got 3% and as inflation is 2 and a bit % the interest is utterly irrelevant.

I have tried doing it on secondhand cars (Approved used Jag XF) which was £15k. I said to dealer about bike and that car was 50% more than bike so I'd up the deposit to £4,500 and expect at least £9k GMFV but he still wanted £200+/month which I pointed out should be more like £85 ish

quote:

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Originally posted by sdh2903
I do it. If you want a new car but don't want to outlay the cash. All the folks who yelp about paying cash and no debt etc really don't understand it.

For starters leasing (pch) and personal contract purchase ( pcp) are 2 totally different things. I would not touch a pcp ever as your basically tied in to get a new car from a certain dealer.

I get a new car every 2 years. I shop around for the best offers at the time and don't get fixated on any particular car. I've had a focus diesel. A fiesta St and a golf gti. All the lease rates on these have been well under the market depreciation if I'd have bought. I've never had to buy a tyre, tax or anything other than a cheap first service. I'm a car enthusiast but have no real desire to maintain a banger. I have my projects for tinkering.

I could go out and buy a new car but id rather keep my savings where they are and let someone else take the financial hit of buying. And after the 2 years I walk away into something else or I go back to an older car.

A mate who's so far into a pcp he can barely see daylight on the exact same golf as me can't believe the cost difference between him and me. And at the end of his contract he will have no equity just like me.

---

Do your own sums and settle for what works for you.

New Mini 5 years ago, planning to keep at least 6 years and I am financially better off buying cash with a decent discount over any BMW offer.

End of last year approved used Disco sport, again did my sums. Waved cash under the dealers nose and with everything else taken into account they could not offer a better deal than my cash offer.

What put me off is the uncertainty of return and excess mileage charges, particularly the risk of a job change meaning lots more miles.

Thanks, lots of interesting posts and not something I knew much about

quote:

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Originally posted by peter030371
Do your own sums and settle for what works for you.

New Mini 5 years ago, planning to keep at least 6 years and I am financially better off buying cash with a decent discount over any BMW offer.

End of last year approved used Disco sport, again did my sums. Waved cash under the dealers nose and with everything else taken into account they could not offer a better deal than my cash offer.

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quote:

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Originally posted by kingster996


You’re absolutely right.

My sums don’t work in a six year “keep” - but I didn’t want to keep a car for three years after the warranty expires. So for a new car every 3-4 years it’s cheaper to hire. Pch (not pcp, that sucks) means you effectively only pay for depreciation (factoring in the very big discount that leasing companies get vs your own cash discount)

Either way you pay for depreciation and I’d rather not have (for example) £10-12k of my own money sat in a car waiting to use it as a deposit on the next one (or to pay off a chunk of the 5yr hp)

If you want to keep a car for a long time and lots of miles pch is not viable - but you also need to factor in repairs, mot, tyres, extra warranty etc. As I do low miles it works for me. I don’t even need new tyres when it goes back, perfect fixed cost motoring that suits me as I don’t have £25k spare cash lying around.

My current hire is for a £23k car. Will cost £8k over 3yrs. Bargain.

[Edited on 25/7/18 by kingster996]

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quote:

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Originally posted by peter030371
So in summary, everyone is different

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quote:

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Originally posted by peter030371

Savings earn LESS interest than the cost of borrowing or the financial industry would go bust. £30k in the bank will earn less interest than the cost of borrowing £30k to buy a car.

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Whatever you do, you've got to work out what the car is for, find a car that meets your requirements and then do some maths!

If you want a new car and the benefits of warranties then for a lot of people the 'finance' options can be useful but you've just got to factor for your circumstances whether that's best or whether the 'finance' is actually just tempting you to spend more than you have/want to spend - obviously we all know that this is a major purpose of the arrangements, to encourage additional sales and spending which punters otherwise wouldn't do.

Clearly there are a lot of people on this forum with the nouse to get a good deal for them out of a finance arrangement but I think you need to be good with money to even consider this type of arrangement. If you're not good with money I would recommend that you avoid debt as much as possible because if you've not worked out everything correctly in advance and things go wrong they can spiral out of control if you're not careful.

The question you should be asking is who would want a brand new car every 2 to 3 years ? Then you would have your answer as well.

A few posts refer to the PCP type contracts which are expensive overall and are used by dealers to put people in cars they wouldn’t normally afford. Ridiculous mileage caps and large final oayments to keep the monthly cost down, add up to n expensive package. Just to reiterate they are considerably different to the lease type arrangement which more like long term car hire.

There are some bargains out there, currently my provider are offering staggering deals on BMW 330e Msport with leather, satnav etc around £360 a month mileage dependent.

As mentioned piece of mind and a fixed cost is important to me plus the ability to travel reliably and in some comfort for my job (NHS) across the potholed congested roads in the south east. Not sure what type of person that makes me...

I’m retiring soon so no more new cars then as my needs will change considerably. Hopefully an 18 month old low mileage Guilia Quadrifoglio will be worth not much more than a fiver, will be bought outright and be my weapon of choice for a few years.

Pcp = perpetual car prison.

quote:

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Originally posted by wylliezx9r
The question you should be asking is who would want a brand new car every 2 to 3 years ? Then you would have your answer as well.

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My turn,

I think I’m on the other end of this. I have always bought my cars cash. I’ve never owned a new car. I doubt I’ll ever own a new car.
I usually go for a 6-8 year old top of the range with 60-80 k on the clocks.

My previous cars include, Audi S3,S4,S4 Avant, civic type r, Golf R32.
I do generally look for a huge wad of service history and I take a good look at owner/area/mot history.

My current car is a BMW 335i saloon with custom down pipes, a pair of induction filters, front mout intercooler and a remap. It’s got huge service history and is very well maintained.

I get close to 400bhp with a shed load of torque for under 8 grand. I’ll drive it and maintain it well for a couple of years the replace with something equally as quick/nice.

So, someone else has had the depreciation hit and paid for the majority of the ‘big’ service visits. If it gets written off or nicked. It’s not the end of my world.

It’s really interesting to see all the differing opinions.

well like I said earlier, I'd like a new car purely so that I had a clean slate, perfect example not mucked about in anyway which I would look after for a very long time, hopefully at least 25 odd years.

If I do get one the first thing I'd do is get the underside fully coated with truck pickup bed coating such as line-x and fit a stainless exhaust. It would be stored in the garage next to my current Fiesta so should remain in perfect condition for years and years. My current Fiesta is 14 years old and should last at least till it's 20 having been just given new suspension all round and only 61k on the clock, it may be used in the winter to avoid using the new one in the salt.

To me getting such a long life out a car (may last till I'm 70 ) justifies buying a new one for £14k and depreciation really doesn't really count. I have taken into account not to buy such extra's as sat nav etc as there is no reason to believe Ford would update software for these and in 10 years would just seem antiquated, in 20 would look like they belong in a museum so just to go for useful things like power windows, heated windscreen etc

I just bought a 2010 Galaxy for the missus. Its more or less mint condition. Its had the clutch and timing belt done and has full service history. It has aircon, bluetooth, satnav etc etc etc. The kids are already grinding biscuits into the leather and the missus is a wrecker. I paid £3K. New they are 28K.

I just don't understand why you buy new or lease unless your a business

quote:

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Originally posted by Mr Whippy
interesting replies for sure

read my original post properly, sneering I'm not

I'm actually thinking seriously on buying a new Fiesta for myself (Titanium 1.0 5 door) as I really like them and know I will keep it a very long time but would like to start with a perfect example in the beginning (my £300 one although a good buy at 60k miles has rust on the underside that will eventually kill it regardless of what I do). I've been looking at the various ways of financing it and the lease option seems to make no sense at all unless I was just interested in getting new cars every few years and willing to fork out the extra but is nothing about saving money.

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quote:

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Originally posted by Irony

The kids are already grinding biscuits into the leather and the missus is a wrecker. I paid £3K. New they are 28K.

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