What are people thoughts on leasing?

[thompson31]

Hello All,

Haven't been on here for a while! First year of my car is out the way, one more to go!

I'm constantly wondering what to do when the 2 years are up.

Up until recently I was adamant I wasn't leasing again as I had the normal thoughts of "I'm paying £370 per month for nothing at the end" "all I'm doing is renting it" "I own nothing after the terms finished" bla bla bla.

But. On the flip side of this. To get the sort of car I would want I would need to spend about £20-£25k. I wouldn't want put no more than £5,000 deposit down meaning over 4 years it would be £378ish. Basing on a £20k car. Am I going to keep the car for 4 years, probably not. Plus it's going to be an older car meaning things go wrong and it won't have main dealer Wty unless I bought one. Which aren't cheap.

I like the idea of the leasing when you know the monthly payment is all you have to spend, any problems with the car it goes back to mercedes. And I'm in a brand new car every 2 years.

Really confused with it all!

Please give me your thoughts

Thanks

Jack

 

[AGordCL]

I think the idea is brilliant, I shall be doing it myself fairly soon.

You get to enjoy the use of a brand new car for 2-4 years for a small percentage of the cost, if you like your cars you'll most likely want a change after that period anyway...you don't have to worry about tax and maintenance (if you choose that sort of plan) and you have a fixed monthly cost...

Yes you don't own the car but what's the real benefit, you can mod it? Fair enough...it's an asset, well if you keep it for long enough it might appreciate but you'll want riddance of it by then...or if you want to be able to sell the car to free up some money, well you probably can't afford that car if you might need to do that..

I would say if you're looking to spend upwards of £20k on a car - lease it, anything more expensive than that is going to see a lot of depreciation...

Unless it's something very special like an SLS

 

[Iwoody]

I once read somewhere that if it appreciates, buy it. If it depreciates, lease it.

That said I bought my car outright as I can't stand having monthly bills, I'm self employed and I hate the thought of having to go to work because I've got the car to pay for etc.

 

[flowrider]

If you do a search there are already a few threads on this subject, if you hang on for a while the lease haters will soon be along.

 

[davidjpowell]

Used to do it. Done finance. Always costs a fortune because of my mileage.

Now buy a car for between £1 and £5k and drive it until I get bored. I make sure the running costs will not be murderous so 5 litre V8's are out, big diesels in. I look at high mileage cars as great options. If I get a big bill (happens very rarely) I look on it as just 2 months lease payment etc.....

Not everyone can cope with the loss of status/amenity - my brother thinks I'm mad. As I've recently bought a Merc on this basis I probably am.

 

[Harrythedog]

Don't forget you get the basic spec with a lease car unless you pay a fortune to add some extras. Personally I a full loaded 1 to 2 year model and keep it for a few years as I do low mileage.
It's all done to personal choice in the end, do what you think is best

 

[paneraiseeker]

If you do a search there are already a few threads on this subject, if you hang on for a while the lease haters will soon be along.

With the I only pay cash brigade to follow.

 

[edstrom76]

Don't forget you get the basic spec with a lease car unless you pay a fortune to add some extras. Personally I a full loaded 1 to 2 year model and keep it for a few years as I do low mileage.
It's all done to personal choice in the end, do what you think is best

MB do good trim lines I reckon. An AMG Line Premium Plus (new C-class as an example) comes equipped with pretty much everything one could wish for or need.

 

[Spin_bowler]

MB do good trim lines I reckon. An AMG Line Premium Plus (new C-class as an example) comes equipped with pretty much everything one could wish for or need.

Agreed, my 'poverty spec' E-Class has, leather, COMAND which you can play music from about eight different ways, interior lights that change colour (why?), it tells you if you're falling asleep, DAB, heated seats, type pressure monitoring, blah, blah, blah.

For less than £90 a week. Lease suits me at the moment.

 

[markjay]

I once read somewhere that if it appreciates, buy it. If it depreciates, lease it.

Not sure about the second part, you pay the depreciation in either case - up front or in installments.

From the financial perspective there would be an advantage to leasing assuming that finance providers pay much less for the car than you would as a private buyer. In that case the depreciation plus interest and fees might still work-out cheaper than when simply buying the car outright.

That said I bought my car outright as I can't stand having monthly bills, I'm self employed and I hate the thought of having to go to work because I've got the car to pay for etc.

I agree with that, many people don't like monthly bills. But the counter argument is that by leasing you can get a car that you could otherwise not afford to buy.

 

[stevehg]

Not sure about the second part, you pay the depreciation in either case - up front or in installments.

The saying mostly comes from business accounting. Don't have your working capital tied up in depreciating assets. Much better to free up capital to invest, and lease depreciating assets through working cash flow.

But the counter argument is that by leasing you can get a car that you could otherwise not afford to buy.

As the purpose of leasing demonstrates that there is no intention to buy/own, surely this point is pretty irrelevant? If you can afford the payments, you can afford to drive it. It has nothing to do with ownership.

 

[markjay]

The saying mostly comes from business accounting. Don't have your working capital tied up in depreciating assets. Much better to free up capital to invest, and lease depreciating assets through working cash flow.

As the purpose of leasing demonstrates that there is no intention to buy/own, surely this point is pretty irrelevant? If you can afford the payments, you can afford to drive it. It has nothing to do with ownership.

You are quite right, I was referring to private buyers not businesses where the considerations are very different.

For a business, the advantage of leasing is that the capital can obviuosly be put to better use elsewhere.

For private buyers, there are two key scenarios.

Scenario a is that the capital sits in a saving account, in which case it would be fairly easy to calculate if it is best to keep it where it is and take finance on the car, or use the capital to finance the car.

Scenario b is that the capital is either not available or tied-up in assets. In this case leasing may be the only option as it means that you only need to be able to afford the depriciation (plus interest) but not the capital.

But, when it comes to private buyers, there is another consideration. You will often find that people buy the cars that make them feel good, and not necessarily those that make sense (in fact, some car owners do not even 'need' a car). In this context, if it makes one feel good to own the car as opposed to leasing it, then this is subjective and you can't really argue with that....

 

[Dryce]

Don't forget you get the basic spec with a lease car unless you pay a fortune to add some extras.

That's oversimplifying. What kills on a lease are options. Most manufacturers offer different trim levels - eg. 'MSport', 'Avantgarde', whatever.

Also an S Class or 6 Series 'basic' isn't exactly basic.

 

[Primo]

We've got a C220 Sport AMG coming to the end of a 3 year deal in May. It's with MB Finance and we got their end of deal paperwork last month reminding us what chips, damage etc. is acceptable and what isn't. To be fair it was also very clear from inception. I like their approach and it makes me more inclined to use them in future too.

 

[geraldrobins]

Ive never bought a new car but usually buy 1-2 years old.
Looking at the lease deals on MB, a new Class would cost, over 3 years, about half of the list price. I doubt if you bought one new, that you would get half the new cost back if you traded in after 3 years. So leasing looks a not unattractive deal, even with discounts,unless Ive missed something.

 

[Spin_bowler]

Ive never bought a new car but usually buy 1-2 years old.
Looking at the lease deals on MB, a new Class would cost, over 3 years, about half of the list price. I doubt if you bought one new, that you would get half the new cost back if you traded in after 3 years. So leasing looks a not unattractive deal, even with discounts,unless Ive missed something.

Nope, you haven't. That's about the size of it. There's the consideration of new car discount to think about when comparing like for like deals but a new car is going to cost you one way or another. I think, on balance ,that with the finance deals available on MBs at the moment for a new car leasing pips buying.

 

[Red C220]

I've leased, PCP Financed, bought outright cash and with HP.

Sometimes it not as straightforward as one is right over another, it all depends on the deal available.

If you don't mind colour, spec, model or exact engine size then lease might be the way forward as you can look for what's on offer for a car available at short notice and get a deal that is actually less than the depreciation of the vehicle if you bought outright.

If you want to walk into a dealership and list exactly what you want, in the colour you want, in the model you want then buy outright or PCP or even HP. But look at the entire term cost of the agreement including deposit and payments to weigh up which is the better deal.

If it's the latter have a good look at Drive the Deal or Orange Wheels to see what's available.

I also own and run a business and there are no circumstances under which I would buy/lease/contract hire a vehicle through the business these days unless it was a commercial vehicle pool car or was a legitimate business expense such as an executive or hire car business. The tax implications are now so punitive, any saving made buying as a business is entirely wiped in taxation.

 

[thompson31]

Thanks for all your feedback everyone. At the moment, I'm swaying into leasing again to be honest.

See what happens over the next year though!

 

[Spin_bowler]

Thanks for all your feedback everyone. At the moment, I'm swaying into leasing again to be honest.

See what happens over the next year though!

I got Freedom Contracts December Deals emailed to me this morning, the standout cheapest was E220 estate for less than £240/month once you add VAT on a 9+23 profile. So, even once the upfront is added in, you're looking at £73/week.

NB I've no association with Freedom other than being on their mailing list. I didn't even get my lease from them as I got a better deal elsewhere