Lease, finance or buy

[Bristle Hound]

PS I try and stick to 1+23 month lease deals
Slightly more on the monthlies but no big deposit
Got to do what works for you TBH

My wife got a new 5 door MINI Cooper S petrol with metallic paint on a PCH deal last September
1+23, £170/month, 6000 miles per year
Haven't found another PCH MINI deal as cheap since TBH

I've signed up for email alerts of all the main leasers
Plenty of deals thro' CentralVehicleLeasing

 

[V6_Man]

That was just a flippant example.

But I have taken the trouble of finding a used A4 black edition 2.0TDI with good spec for £19750. Probably get it down to £19,500 easy.

https://usedcars.audi.co.uk/usedcar...,800|1041,20000|1070,2014/l|12,1,PRICE_SALE,U

Now you put down £5k and get a £14,500 loan from the bank at 3.9% APR over 36months (which is £420 per month). Cost of loan is £700.

You sell the car 3yrs later for 50% of its value (probably get more), so lets say £10k. Looking at 7yr old A4 black edition with 50k, thats more than fair.

So cost to own that used A4 over 3 yrs is £19,500 + £700 for the loan - £10,000 for the sale price. Thats £10,200 in depreciation and interest.

Equivalent spec A4 black edition brand new is £40k. £38k base and about £2k worth of options. You can get 18% discount so looking at £33k discounted price, and with a £5k deposit over 36m and 10k miles it's £370 per month, so that totals £18000.

A whopping £8k more than buying a 15plate used model with 17k miles on the clock....

You cant honestly tell me you expect the servicing and maintenance on a 15plate A4 with 17k miles is going to cost you more than £8k over 3 yrs....??

You're buying it after its major service, so have to factor in another minor and another major, and the major will be cheaper than new as you can use fixed prices. So cheaper than New.

Add in £200 for gearbox oil and £60 for brake fluid.

It will have new tyres and brakes as part of approved used, will have 12months warranty, and still wont need MOT in its first year of ownership.

An extra £1k if you're lucky. Extra £3k if you're really unlucky. Still

And while you put in £5k into the PCP, you have to find another £5k for the next one, despite already spending £18k!
For the used car you put in £5k, and now you have £10k!

New cars a vastly more expensive. Any notion that repair bills on a barely used car will exceed the deprecation and interest paid on a new car is just false IMO, and I've yet to see anything to convince me otherwise...

Again, if you want new cars, thats perfectly fine. I don't get the need to try and justify it as 'cost effective' over a used car. Just not true! Everyone knows new cars are stupidly expensive!!

^^^ This . Couldn’t have said it better. TBH, this is the exact type of analysis I was doing every time I would buy a new car.

Another example is of a 10yr old banger. Our DD, which my wife drives is a 56 plate A4, 2.0tdi multitronic. When I bought it Jan last year the car had only 50.5k on the clock. I bought it for £5,300 from an old couple in Leeds. Was really lucky at the price with this mileage at the time was nearly £7k. Currently, it sits at 66k. Since buying the car my total maintenance costs on the car are:

2x Full services @160/ service - £320
1x MoT - £50
Lower Control Arms (inc labour) - £220.
Alloy Refurb - £270 (not needed but had to be done)

I do full service after every 10k miles on the car. Buy the parts from either TPS or ECP and use an Indy.

My other B7 A4, which I sold before I bought my S4 was a 56 plate A4 2.tdi manual (170bhp) with 69k on the clock. I bought it in 2014 from Aberdeen from a private seller for £5.5k and again, was lucky to find a good deal as I got it nearly £1.5k cheaper than the standard saw price. My total maintenance costs were:

3x Full Services @£160 each - £480
4 new tyres @£380 including wheel alignment.
Brake pads / discs (all round) - don’t remember the costs but let’s say £300
Offside hub assembly (hit a pothole) - £90 from eBay and £40 labour - £130

Total maintenance costs - £1,290

Sold the car for £4,500 after clocking up
Less maintenance costs - £1,290

Actual sale price - £3,210.

Looking at the maths, I believe I was still better off as I had £3k in hand to use elsewhere.




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[A4AvantBlackEdition]

PS I try and stick to 1+23 month lease deals
Slightly more on the monthlies but no big deposit
Got to do what works for you TBH

My wife got a new 5 door MINI Cooper S petrol with metallic paint on a PCH deal last September
1+23, £170/month, 6000 miles per year
Haven't found another PCH MINI deal as cheap since TBH

I've signed up for email alerts of all the main leasers
Plenty of deals thro' CentralVehicleLeasing

That is a very good deal.

 

[JudderMan]

Very interesting debate chaps. I had rhe same quandary up until yesterday, got finance on an A1 after multiple engine failures on cars (see sig), OK they're far older than what you're talking about but I couldn't justify paying £200pm lease for 2 years on say an Octavia VRS or Kodiaq which the wife liked, to then worry that my daughter might break something inside (air vents and cup holders are her speciality) or scratches and dings, to then hand back as it was never my car. Ownership is a big factor to me, but as someone said earlier, being under the car not in it I'm done with.

£200pm on a 5yr old A1 seems reasonable as in 4 years time I bet it'll still be fairly strong figures at 4-5k (it's a Mini alternative and far better IMO) and 10 year old minis still go for that much sometimes more.

It depends on the car you want, an S4 is gonna hold value (after the first 2-3 year depreciation) compared to an A4, but get a TDI Avant and those two things are always sought - after even after 15 years.

The numbers you guys mention give great arguments on both sides, I suppose the newness factor plays a part in leasing but borrowing someone else's car isn't my idea of fun with a 3 year old and a wife that's a new driver. People's circumstances differ.

 

[A4A4]

I personally chose to buy Audi ex-demo car which are under 6 months old, full of spec plus saving loads on the new price.
Then keep the car for 8 - 10 years which gives plenty of time to save for the next one. (won't be an Audi)

I know leasing is popular and the only way majority of people can afford a nice Audi on the drive.
But when a leasing payment gets to more than an the average monthly mortgage payment. 'dead money'

 

[DieselJake]

Woah 8 - 10 years is a long time for car ownership (although technically I've had mine about 8 now) if it ain't broke don't fix it

 

[A4AvantBlackEdition]

I personally chose to buy Audi ex-demo car which are under 6 months old, full of spec plus saving loads on the new price.
Then keep the car for 8 - 10 years which gives plenty of time to save for the next one. (won't be an Audi)

I know leasing is popular and the only way majority of people can afford a nice Audi on the drive.
But when a leasing payment gets to more than an the average monthly mortgage payment. 'dead money'

TEN YEARS! I can barely live with the same car for two years never mind ten. I think the longest I’ve had a car was three years and I bought than one from new. I get bored easily.

 

[A4A4]

TEN YEARS! I can barely live with the same car for two years never mind ten. I think the longest I’ve had a car was three years and I bought than one from new. I get bored easily.

Woah 8 - 10 years is a long time for car ownership (although technically I've had mine about 8 now) if it ain't broke don't fix it

If stays reliable, looks good nick, running cost low and it's doing its main job getting from A - B.

I get content with it and enjoy the free motoring. Money in the bank!

 

[Raiden]

Glad I saw this thread as I was thinking about changing cars next year now that mine will be paid off at the end of the month. I would like the Golf R or S3 8V but just really confused on how to buy one.

I like the idea of a low monthly payment and then cut it loose after 2 or 3 years but with PCP is servicing extra? Or if I get a used car is PCP a bad idea? Also I do about 15k a year

I always brought used in the past and finance it on a interest free credit card.

 

[A4AvantBlackEdition]

Glad I saw this thread as I was thinking about changing cars next year now that mine will be paid off at the end of the month. I would like the Golf R or S3 8V but just really confused on how to buy one.

I like the idea of a low monthly payment and then cut it loose after 2 or 3 years but with PCP is servicing extra? Or if I get a used car is PCP a bad idea? Also I do about 15k a year

I always brought used in the past and finance it on a interest free credit card.

You can always add on tyres and maintenance onto a lease deal. It put my monthly price up about £25 if I remember correctly. That covers tax, tyres and servicing etc.

 

[V6_Man]

Glad I saw this thread as I was thinking about changing cars next year now that mine will be paid off at the end of the month. I would like the Golf R or S3 8V but just really confused on how to buy one.

I like the idea of a low monthly payment and then cut it loose after 2 or 3 years but with PCP is servicing extra? Or if I get a used car is PCP a bad idea? Also I do about 15k a year

I always brought used in the past and finance it on a interest free credit card.

Here is a more ‘in-depth’ analysis of the same thing and which one is better, which is off course relative to which side you are on


http://www.audi-sport.net/xf/threads/impatience.349303/

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[Raiden]

You can always add on tyres and maintenance onto a lease deal. It put my monthly price up about £25 if I remember correctly. That covers tax, tyres and servicing etc.

£25 is nothing really. Looks like it’s time to look for some deals


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[A4AvantBlackEdition]

£25 is nothing really. Looks like it’s time to look for some deals


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Yeah, it was a no brainier to me. Chances are I would need new tyres before it goes back after two years and 20k miles and the two services alone would be worth it.

 

[Raiden]

Do you think my millage would be a killer?

 

[A4AvantBlackEdition]

Do you think my millage would be a killer?

I don’t think so. Most least deals have mileage ranging from 5k to 15k per year. Obviously you will pay more for 15k over 10k.

Just a quick look, on the s3 the difference between 10k per year and 15k per year is about £80 a month.

 

[b2]

The problem is people want to live beyond their means and enjoy the status of having a brand new car and are willing to pay anything for it, because in reality a lot of us can not afford to buy these vehicles outright. With depreciation so high why would you buy a new car outright anyway, it don't make no sense and that is why there has been such as increase in the PCP/Lease culture over the last few years. This is always going to be debatable as traditionally people are used to the idea of owning their car, but then there are people who want a brand new car with no stress/worry of maintaining or owning it and leasing has more advantages for them. Myself personally I can see how leasing is a good alternative to owning a car and it does has some benefits, but as a homeowner and family man I do not need the stress about paying another big monthly bill for the sake of driving around in a brand new car, if I want a swanky motor I will save up for it and buy it when I can afford it, each to their own.

 

[A4AvantBlackEdition]

The problem is people want to live beyond their means and enjoy the status of having a brand new car and are willing to pay anything for it, because in reality a lot of us can not afford to buy these vehicles outright. With depreciation so high why would you buy a new car outright anyway, it don't make no sense and that is why there has been such as increase in the PCP/Lease culture over the last few years. This is always going to be debatable as traditionally people are used to the idea of owning their car, but then there are people who want a brand new car with no stress/worry of maintaining or owning it and leasing has more advantages for them. Myself personally I can see how leasing is a good alternative to owning a car and it does has some benefits, but as a homeowner and family man I do not need the stress about paying another big monthly bill for the sake of driving around in a brand new car, if I want a swanky motor I will save up for it and buy it when I can afford it.

For me, it’s not that I couldn’t afford it, it was just a really good deal.

On my current car for example the guaranteed value offered to me by the dealer meant that the depreciation was more than what I was paying over two years so it was cheaper for me to lease than to buy for two years.

 

[Raiden]

I don't like the idea of leasing but if the right deal comes along then why not? My current car was almost 7 years old when I got it and still a lot of money for a car that old. Who really has thousands of pounds spare to buy any car out right? Did my best to have the money ready in the bank but life gets in the way. Unlike most people my credit cards have massive limits and I just get the money that way interest free as and when. But next car i'm gonna look into leasing. Working out what it would cost me i'd pay a extra £50 a month for a brand new car and if it every went wrong it won't cost me anything to fix. Each to there own

 

[DrEskimo]

I don't like the idea of leasing but if the right deal comes along then why not? My current car was almost 7 years old when I got it and still a lot of money for a car that old. Who really has thousands of pounds spare to buy any car out right? Did my best to have the money ready in the bank but life gets in the way. Unlike most people my credit cards have massive limits and I just get the money that way interest free as and when. But next car i'm gonna look into leasing. Working out what it would cost me i'd pay a extra £50 a month for a brand new car and if it every went wrong it won't cost me anything to fix. Each to there own

How much was the 7yr old car...?!

For a 7yr old car to have nearly the same depreciation as a new one, either means you’ve had to rebuild it 2/3 time over, or the lease is based on a significantly cheaper car...?

Also, are you factoring the extra income you have by not paying the monthly lease? Buying outright, compared to getting a lease say at £350 over 3yrs means you also have an extra £350 in your bank each month...

 

[A4AvantBlackEdition]

I don't like the idea of leasing but if the right deal comes along then why not? My current car was almost 7 years old when I got it and still a lot of money for a car that old. Who really has thousands of pounds spare to buy any car out right? Did my best to have the money ready in the bank but life gets in the way. Unlike most people my credit cards have massive limits and I just get the money that way interest free as and when. But next car i'm gonna look into leasing. Working out what it would cost me i'd pay a extra £50 a month for a brand new car and if it every went wrong it won't cost me anything to fix. Each to there own

This is another reason I lease. I love the idea that I have zero maintenance costs. Yes I will probably pay out more every month in the long run, but knowing my car costs me, say, £260 a month and I will never have any additional costs to run the car on top of this gives me a lot of piece of mind. And even though I am sure I could get a well maintained car that may not require much in terms of repairs and maintenance over two years, I could also be unlucky and get a car that breaks down 5 miles down the road and has a complete engine fialure, requires flatbedding from Cumbria to East Yorkshire and needs a new engine to get it running which costs almost as much as what I paid for the car. Which happened to me many years ago.

I highly doubt I will ever buy a brand new car again (I’ve owned two cars from brand new) leasing just makes so much sense to me and I love a brand new car every two years.

 

[DrEskimo]

This is another reason I lease. I love the idea that I have zero maintenance costs. Yes I will probably pay out more every month in the long run, but knowing my car costs me, say, £260 a month and I will never have any additional costs to run the car on top of this gives me a lot of piece of mind. And even though I am sure I could get a well maintained car that may not require much in terms of repairs and maintenance over two years, I could also be unlucky and get a car that breaks down 5 miles down the road and has a complete engine fialure, requires flatbedding from Cumbria to East Yorkshire and needs a new engine to get it running which costs almost as much as what I paid for the car. Which happened to me many years ago.

I highly doubt I will ever buy a brand new car again (I’ve owned two cars from brand new) leasing just makes so much sense to me and I love a brand new car every two years.

Sure, but warranties aren’t exclusive to new cars...

My dad bought his 3yr old Lexus RX450h used and it’s now 7yrs old and still under a Lexus warranty.

His costs over the last 4yrs would still be a fraction of the cost of leasing (along with all the other benefits, like no debt, no mileage cap, and an asset he can sell whenever).

Obviously the only downside is he isn’t driving a new car...!

 

[Raiden]

How much was the 7yr old car...?!

For a 7yr old car to have nearly the same depreciation as a new one, either means you’ve had to rebuild it 2/3 time over, or the lease is based on a significantly cheaper car...?

Also, are you factoring the extra income you have by not paying the monthly lease? Buying outright, compared to getting a lease say at £350 over 3yrs means you also have an extra £350 in your bank each month...

This is why I really need to sit down and work out the costs next time I buy a car.

My current S3 cost 14k total and my deposit was 7.5k then the rest was on a card. Minimum I Pay was £250 a month and it’s paid off this month so it’s take me 23 months to pay for it interest free. But servicing,tyres etc comes out my pocket. Luckily it hasn’t needed a lot in the time I’ve had it. To me lease doesn’t look that much more but my maths could be wrong?


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[A4AvantBlackEdition]

Sure, but warranties aren’t exclusive to new cars...

My dad bought his 3yr old Lexus RX450h used and it’s now 7yrs old and still under a Lexus warranty.

His costs over the last 4yrs would still be a fraction of the cost of leasing (along with all the other benefits, like no debt, no mileage cap, and an asset he can sell whenever).

Obviously the only downside is he isn’t driving a new car...!

The extended warranties are often limited though.

But the main factor for me is having a new car every two years. The one I’m in now only has 17k miles and looks brand new inside and out but I’m bored and can’t want to get my new one in two weeks.

 

[DrEskimo]

This is why I really need to sit down and work out the costs next time I buy a car.

My current S3 cost 14k total and my deposit was 7.5k then the rest was on a card. Minimum I Pay was £250 a month and it’s paid off this month so it’s take me 23 months to pay for it interest free. But servicing,tyres etc comes out my pocket. Luckily it hasn’t needed a lot in the time I’ve had it. To me lease doesn’t look that much more but my maths could be wrong?


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Ah OK.

Nah that makes perfect sense, your monthly cost is likely to be pretty high..!

It depends if you want to look at it from a per month view, or total cost over a period (say over 3yrs to compare it to a 3yr lease)? Obviously many just look at the month to month cost, but I'm of the opinion that this can be misleading.

What I tend to do is look at what the cost of the lease over 3yrs would be, vs. the cost of a used car bought then sold after 3yrs, plus any extra repair/maintenance costs. So in your case, £14,000, then assume a sale price of about £8,000...?, so £6,000 in depreciation, then any other costs involved, like warranties or repair work and additional services. Usually find its about £2,000 extra, so around £8/9k over 3 yrs. Obviously this is the big unknown bit that many look at PCP and leasing for, as it could be very little, or it could be very high. I still think that on average, it will be no where near the extra you pay on new car depreciation though...particularly if you go for extended warranties.

Compare that to a lease. On a S3 it's about £2k down and £300 per month. Need to adjust this for any options your current S3 has and the mileage, as this would typically be a basic spec with 5k miles.... But anyway, thats £12,500.

So the cost difference is up to £4,500 over the 36months.
Also, you have £8,000 in your pocket when you sell the current S3. After a lease you have £0 (meaning going into your savings for the next deposit...).
And you can also factor in the extra income. In your case you are paying £250 over 23, then £0 over 12m. So that's an extra £50 over the first 23months, then an extra £300 over the next 12m. £4,750 if my maths are correct.

So not only is the lease more expensive over the term, it also leaves you with nothing at the end, and it sucks up a considerable amount of your disposable income.

Obviously would need to look at exact numbers in terms of warranties and sale price of your S3, then a comparable lease deal, but that's how I calculate it.

 

[DrEskimo]

The extended warranties are often limited though.

But the main factor for me is having a new car every two years. The one I’m in now only has 17k miles and looks brand new inside and out but I’m bored and can’t want to get my new one in two weeks.

Ah mate I'm exactly the same. My last 3 cars were a used Golf I sold after 2yrs, a used A5 that I sold after 2yrs and a new S5 on a 2yr PCP. I just cant get over the extra money involved after doing the PCP though...I think maybe if I was still driving everyday I would probably say 'sod it!', but I barely drive at all now so dont even have a car!

...and my Dad is constantly swooning after the new RX model....!

 

[Tj 0785]

I don't see the point in leasing a car it's just wasted money in my eyes. I could lease a car and claim some of it back through work but it would kill
Me paying thousands out to not actually own the car . I've got my r32 on finance the only downside being I'm stuck with it for 3 years till it's paid off.

 

[joinerman]

Call me old fashioned but i don't do loans / finance etc, I've always saved until i could afford, you know where stand that way, it's served me well through life.

 

[A4AvantBlackEdition]

Call me old fashioned but i don't do loans / finance etc, I've always saved until i could afford, you know where stand that way, it's served me well through life.

How long did it take to save for your house?

 

[joinerman]

No mortgage. Five years of working 12 - 14 days & my dad made up the shortfall when i did buy, this was back in the 70s

 

[A4AvantBlackEdition]

No mortgage. Five years of working 12 - 14 days & my dad made up the shortfall when i did buy, this was back in the 70s

Kudos buddy. The only finance I have is a mortgage and car on lease. Another 10 years and I hope to be mortgage free though. I’m too impatient to wait to save up to buy a car.