Maths.

Voting hot just for the math

Why is it only car deals that people on here say "you can get one cheaper second hand"?
Why not vote a new mattress cold because you got one cheaper second hand? Or Underpants or Toothbrushes or, well, everything! Comparing new to second hand on a deal site doesn't make a lot of sense to me.

Why don't you just buy a car ffs??? I've got a Metro that is still going strong after more than 14 years! PCP is pure MUGGERY imo!

Ive got a 1.5 diesel colt automatic. When there's little traffic i get around 40mpg in town. In traffic its 25mpg and if im driving a roads or motorway then i get 60mpg.

Very true. But ive seen 2015 plate outlander with 25k on clock for below 15k which is 7 k more than 3yr lease and you get to keep the car. And if you get a loan they're around 3% fixed compared to the crazy 5+% finance companies offer. Does that sound right?

Do you go above 60? I struggle to get 40!

Nothing spectacular, but a good work horse off road, towing etc and around 50mpg, which is 10mpg better than many of its rivals.

I took out my first ever private lease on a VW tour an last year. I have a brand new touran and over my 2 year lease it will cost me just over £4500. When I looked into buying exactly the same car when you take into confederation the depreciation. The lease wins hands
down. Leasing a car works when you are not fussy about the car you are after. As some amazing offers can be found but they get snapped up quickly.

I am one of the people who don't want to borrow or have something I can't afford to buy. But as a single parent who's 7 seater has just given up, ive been looking into leasing options.

I am still undecided, however I am interested to hear from those who have done this successfully. I agree that times are changing and this may be the way we buy cars in the future. I'm thinking that we pay for so many things that we use and never own outright in the end... broadband, phone line, sky.

Can anyone give me an example of what they were offered to buy the car after the lease ended? Ive heard it's a good discount.

Also does every lease agreement have it's own terms and conditions or are the fairly standard with just a few differences?

Can someone confirm who is the registered owner and registered keeper with private leases please.

you are welcome - as I said I was just balancing up and giving the example with this car, using fleets news predicted values, but I am not disputing that leasing is a good option for some (including myself at present - 20 years from now I think there will be a whole new style of renting which will be common place that would interest me more)

The only comment on the above is on buying with the negative inferred at point of selling on - some would view this as a positive, from the equity gained, at point of changing that lowers their ongoing costs.

Thanks for the break down and for giving a specific example of how owning a 2 year old car for 3 years could be a cheaper option that may suit some.

I'm not trying to say that leasing is the best option for everyone all of the time, just that it is a good option for many people much of the time, including some people who dismiss leasing due to a lack of understanding.

Regarding the costs for owning from year 2 to year 5, my estimation from autotrader prices is that the cost of a 2 year old model with ~20k miles is around £16k, and sale at 5 years & ~50k miles should be around £10k private. So:

Depreciation: £6,000 (over 3 years)
Opportunity cost if paying cash: ~£2k (16k, 4% APR compounded over 3 years)
Cost of borrowing: ~£1.27k (assuming 4% APR, and no early re-payment fees from early re-paid 60 month loan)
Tax: £405
Rough total cost to own from Y2 to Y5 if borrowing: £7,675, or £213.20 per month (or slightly less if you can take a longer loan period with no early re-payment fees)
Rough total cost to own from Y2 to Y5 if buying outright: £8,405, or £233.47 per month

So, with this car which comes with a 5 year warranty (I assumed it was 3 at first!), buying a 2 year old model isn't a bad option, especially if you're able to borrow the money.

So if both options are open to you, the question is whether it's worth paying the extra ~£45 per month if borrowing / £25 per month if buying outright to have the car from new and the benefits of the updated model (improved 4WD system, tweaked interior etc: http://mitsubishi-media.co.uk/release/1331/), and no need to arrange a car sale at the end (which may also have costs).

As you say, some may prefer owning the car and having the choice to keep the car beyond 3 years if they like it and know it hasn't given them any trouble. Also, if you own a car & get a dodgy parking ticket, you can appeal it rather than the lease company just paying it and sending on a bill + charges :smiley:

Why don't you just buy a car ffs??? I've got a Metro that is still going strong after more than 14 years! PCP is pure MUGGERY imo!

Apologies trying to cover too many permutations :disappointed:

Short version in response to Op querying scoff's 2 year suggestion on costing comes out at around £7200 in buying a low mileage model at 2 years old and keeping for 3 years (whilst under warranty) albeit imagine someone buying here would be more likely to fit the 2 to 7 year ownership tbh (KIA chose 7 years to hit a specific demographic).

That's far too long to read my man! (popcorn)

Or perhaps because it suits your own requirements that you choose to see precisely what you choose to. N.B. I am not anti leasing but it is one situation and if you do intend to buy a new car every 2 to 3 years, do not care about ownership, agree to the owners conditions, pay the depreciation and also deal with the initial issues in your own time on something that isn't yours (cars most commonly are in the garage at the beginning or end of their lifecycle) and this all works for you then all is good.

However, as per your challenge lets place some figures:
This car new costs £27,814, est £17,576 in Year 1, £15,200 Year 2,£13,375 Year 3,£11,900 Year 4,£10,725 Year 5, £10,281 Year 6 (Fleet news derived with exception of year 1 and 6)

Comes with a 5 years warranty (£227 to expand by Mitsubishi)

Fleet news also give estimates on service, maintenance and repairs excluding tyres at £55, £75, £70, £115, £130 -(with the mileage constraints you are not getting into any of the really expensive maintenance costs).

Those are trade prices so to be fair you would double for real world costs.

Extra costs of MOT from year 3, road tax and about 10% appreciation in insurance at year 6.

6 years given deliberately to cover the differing permutations dependent on subjective requirements. i.e. what if someone wants a car from new for 6 years - in this case your cost of around £20K for this period isn't much of a saving compared to owning - and after 6 years they may choose to run it into the ground under the premise it isn't costing them anything and at point of failure it has done its task.

However the 2 year mark is the interesting and what you asked for figures on. At this stage the vehicle has already lost 45% of its value (some of car examples lose 65%).
Buying at this stage require less captial and therefore lowers interest and also keeping for 3 years (still under warranty) loses only a further 16% of the car's original value (£4475).

Using your figures that gives roughly 1.5K interest on borrowing an additional 1.2K running costs.Which comes out significantly cheaper and of course not tied to constraints with the added ability to be agile in changing circumstances.

This is not like for like with new but then neither is comparing buying to leasing.

If your aim is to drive a quality vehicle at least cost this is cheaper, the question really comes down to the subjective definition of what you consider to be quality for your requirements which differs for all but each have pro's and con's - the only golden rule I know is all approaches will cost. N.B. if you are getting other tax breaks then leasing becomes a no brainer.

Feel free to pick apart - I'm just doing the devils advocate bit to help keep it more balanced and you did challenge :smile:

Yes. This is what they did to me. Check he Ombudsman's site next month.

Bank of Baroda had to pay another user £1,833.96 for a failed payment (as the user was hit with a penalty). This story has already been published on the Ombudsman's website.

I am very frugal with my money actually, and I am far from rich. I wouldn't be on here if I was!

I am sure I could criticise a lot of the spending you do. Do you buy fizzy drinks? Alcohol? Cigarettes
Unhealthy food? I could go on. That to me is a complete waste of cash but it's not up to me how you spend your money.

If someone enjoys cars and chooses to have a new car then that is there choice, and leasing is the best way to do that unless you plan to keep the vehicle for decades like yourself.

Brilliant Maths

It is because of people like you that's why this country is on its knees! Rich and wasteful!! My love life is not perfect but I am happy with that! Thank you very much Mr. Rusty!

Oh I wasn't making a dig - I've commented on many a thread over time here, and quite a few times it's been a "top post" for whatever value that carries.

I'm an accountant - finances and the like are my life (sadly) and it is easy for me to grasp. But a lot of people see "finance" and bury their head in the sand and get hung-up on the need to own a car - one of the most heavily depreciating assets you can get (other than run-of-the-mill IT equipment circa 2005 when progress was rapid).

Car salespeople must absolutely love the general public that is too afraid to think about their finances for themselves. In dealerships, as soon as I mention to a salesperson that I have no interest in ever owning a vehicle, they don't want to know, as their PCP examples are hideously poor value compared to most leases over the same terms. (not always, but then I don't want to drive a £40k+ car at the moment, which comes with its own associated costs).
They do often seem confused when I state I have no interest in owning a car, though.

Those criticising only do so with vagueness of how second-hand is better. Some criticise with the "just buy it" option, which as you point out, ties up large sums of cash - which we both know is undesirable.

The heat on a deal generally speaks for itself. That's how I see it.

Attention? I just asked a question

I am here because I have tried to weigh up the pro's and con's and was trying to get some opinions (from adults)

My last Mercedes Vito van 05 plate ran for years and years and never gave me a bit of trouble bought it with 80000 miles on the clock drove it into the ground sold it with 140000 miles on the clock - not one bit of trouble

Thought about leasing a new one

Bought another newer one 12 plate with 115000 on the clock used it for 10000 miles not one bit of trouble (engine will probably blow up tomorrow)

I just dont get it

Got a 12 plate Honda CRV Ex for the missus 5 years ago with 40000 on the clock, its now done 65000 again not one bit of trouble

Someone explain to me how spending 10 grand for 3 years driving is a 'thing'

Its not that even compare though, they just say its cheaper like its a given when most of the time its not!
Someone above asked for calculation on the cost of a 2 year old same car and I recon its a safe bet to say that they are actually really close.
Bought the car before my current one on hire purchase. It was a 9 grand car, over 3 years, cost me about 1.5k in interest so real cost of 10.5k. 3 months in had a problem with the gearbox, luckily was still covered as I bought from a garage, would have cost me at least £500. Needed 4 new tyres about a year in, £400. That puts me at 11.4k. Fortunately not much else went wrong while I had it. I got just over 4k for it 3 years on so it essentially cost me 7.4k to own for 3 years...
This for a brand new, much nicer car with a more efficient modern engine (more savings) would have cost me <2k more. There are loads comparable to the car I bought where I could have leased for cheaper, even ignoring the repair costs.
The only way a used car works out cheaper is if you buy something really cheap

Unless I missed it, the majority of people that slate it appear to have never done it themselves.

Maybe some of these threads may benefit from the odd post or two from people that leased and later regretted it. This would offer genuine insight into helping people that are considering it for the first time. Certainly more helpful than non-believers telling others how great their 14 year old Micra is.

It seems to me the majority of leasers on here state their experience as a positive one, which speaks volumes.

Nobody has claimed it's the cheapest way of getting from A to B, and if you can't afford the monthly payments then you should probably stay well clear. It does have obvious benefits though for those that are able to tell the difference between a good leasing offer and a bad one.

I think it's a mix of those who are unwilling to learn, plus a few who genuinely don't understand the financial case for leasing.

I've tried to spell it out clearly for those who are willing to learn, and hope it helps a few.

Though indeed these efforts won't do anything for the highly mathematically challeneged or those unwilling to learn.

So far nobody who criticises leasing has posted any solid numbers backing up their position, which I think demonstrates their lack of understanding. Though so far they haven't continued to argue their case either. Perhaps some are learning.

If one person gains a slightly better understanding that could help them manage their finances in a better way, I'd say the finger presses were worthwhile.

I gave up trying to help people understand leasing. I'd stop bothering and wasting those finger presses and just remember that those people who do lease, understand the mechanics.

My experience is that it's people unwilling to learn that don't understand it and immediately slate it.

What kind of name is Rusty? You are just jealous because you lost money on a PCP! I'm selling my Metro if you want it??

I won't give more to any indian banks, specially govt ones. Shame really!! They seem to still live in past. Had really poor experience with BOI, SBI although not tried BOB but your comments provide me with enough not to. Thanks..

Congratulations on your good luck with reliability - if that could be guaranteed, it'd certainly change the equation.

How much did you pay for your CRV? What was it worth 3 years later? What was the cost of finance, or opportunity cost of cash spent on it?

In answering this you might find that you know first hand what spending ten grand for three years driving feels like.

Ahah. Just after i buy an old xc90

Mathematics

Go on then. Someone has to say it....

Ahem:

Do you own it at 3 years old?

10k per year is well below the figure given as economical worthwhile in the D v P powered vehicle debates.

I wont vote either way though, because my experiences of Mitsubishi are of ultra reliability.

My 2008 Grandis hasnt had a single reliability issue or repair, not even a bulb replaced; and I have owned it since July 2009.

Why is it only car deals that people on here say "you can get one cheaper second hand"?
Why not vote a new mattress cold because you got one cheaper second hand? Or Underpants or Toothbrushes or, well, everything! Comparing new to second hand on a deal site doesn't make a lot of sense to me.

I'd be interested to see whether that could offer better value with depreciation, finance/opportunity cost, and increased maintenance costs factored in.

Can you share how you calculated buying a 2 year old Outlander is better value than this lease deal?

Great deal, and great effort at posting the description. Heat!

Just buy one two years old.
Aleksandr the Meerkat would say... Simples

? True story

Does seem like a huge outlay for what is a very average car (and I like Mitsubishi's), but if it's the cheapest lease deal around then it's a deal i suppose if you really have to have a new car.

Heat from me but then again I must be one of them crazy people that see's the benefits from leasing instead of running a 20year old banger!

The name is a bit silly.

Almost outlandish.

Nearly 10 grand for 3 years driving only 10,000 miles a year at that and the car not even yours bargain NOT ! Why on earth do people pay this sort of money

£3100 a year seems a lot. for a Q7 may be alright but ....
grand duster is coming this year with 7 seats and will be under 10k so u would probably be able to lease that for less than half of that

I get around 54mpg from mine, however my journey is mainly motorway and I am never in a rush.

Heat for the - Why lease and not buy? Think my next will be a lease, same for Mrs.

I'd like to know where you can get 4% pa on £25k

Voting hot just for the math

Saw this earlier on today. Thought it's a smashing deal.