sdh2903
|
| posted on 24/7/18 at 04:34 PM |
|
|
quote:
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.
Some complete nonsense in that post spoken by someone who hasn't actually leased or studied the pch market.
1. The last 2 lease companies I've financed through have been ALD (provide all Ford's finance) and VW financial services. These companies
get cars at a far greater discount than the average Joe can. Therefore can knock them out at a lesser rate. Both my last 2 lease deals have beaten
depreciation. By at least 1k. And both have gone back straight to BCA auctions and sold for less than dealer prices.
2. When settled on a car I check the figures against using savings. Hp and lease. If leasing doesn't come out on top I don't lease. If you
are someone who likes to be very specific and spec options then leasing is not for you.
3. I've done my years of saving thank you. I get a new car as a choice. I've worked to earn that choice. I don't lease to
"jump the years of saving" as you put it. I'd much rather have the money in the bank rather than in a lump of metal unless
it's a classic that's appreciating.
Just back to the OP. I would never raise a thread saying "run an old banger, why do that?" I can see in some ways why running a shed is a
good bet and have done so many times. But don't sneer at folk who don't.
|
|
|
|
|
Mr Whippy
|
| posted on 24/7/18 at 06:26 PM |
|
|
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.
|
|
|
sdh2903
|
| posted on 24/7/18 at 06:41 PM |
|
|
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.
|
|
|
Mr Whippy
|
| posted on 24/7/18 at 06:48 PM |
|
|
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
|
|
|
Mr Whippy
|
| posted on 24/7/18 at 06:54 PM |
|
|
quote:
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.
no I was just asking what it was all about as it didn't seem to make any financial sense, was wondering if I was missing something...
I have the wifes volvo s60 on a bank loan for 4 years, 3 still remaining £135 per month but still not happy with that tbh (probably would have felt
better if she hadn't rammed it into the house, wrote it off (I fixed it) and knocked 3k off the value) idiot she is, I ain't getting her a
nice fancy car again, she can keep that one forever...
Will look into the options more before I commit
[Edited on 24/7/18 by Mr Whippy]
|
|
|
B33fy
|
| posted on 24/7/18 at 08:12 PM |
|
|
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.
|
|
|
Simon
|
| posted on 24/7/18 at 08:51 PM |
|
|
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
|
|
|
kingster996
|
| posted on 24/7/18 at 09:43 PM |
|
|
quote:
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.
With you 100% here Steve. Makes prefect sense.
Recently did a spreadsheet comparing costs including services, depreciation, repairs, consumables on buying a 6 month old used car and chopping in
every 5 years vs a brand new pch every 3 years over s 15 year period. The pch was cheaper.
Only makes sense not to use pch if you want to keep a car until it dies and know how to fix if in betwwen or like runnng old cars and don’t sell very
often.
Or you are a dealer.
[Edited on 24/7/18 by kingster996]
I used to be indecisive, but now I'm not so sure
|
|
|
peter030371
|
| posted on 24/7/18 at 10:08 PM |
|
|
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.
|
|
|
SJ
|
| posted on 25/7/18 at 04:33 AM |
|
|
What put me off is the uncertainty of return and excess mileage charges, particularly the risk of a job change meaning lots more miles.
|
|
|
Mr Whippy
|
| posted on 25/7/18 at 06:00 AM |
|
|
Thanks, lots of interesting posts and not something I knew much about
|
|
|
kingster996
|
| posted on 25/7/18 at 06:24 AM |
|
|
quote:
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.
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]
I used to be indecisive, but now I'm not so sure
|
|
|
peter030371
|
| posted on 25/7/18 at 07:08 AM |
|
|
quote:
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]
So in summary, everyone is different
Both the cars I mention do 12-15k miles per year. I also have extra on all my cars (tow bars, roof rails, black wheels, leather sports seat etc) to
get a car that I like and therefor look after. So in my situation cash is better. Since we got our Mini the new model came out which I don't
like as much so after planning to keep it 6 years I now think we will keep it much longer as nothing else currently available 'floats my
boat' as a replacement.
|
|
|
kingster996
|
| posted on 25/7/18 at 08:00 AM |
|
|
quote:
Originally posted by peter030371
So in summary, everyone is different
Yep
My summary is:
New (or nearly new) car every 2-3 years, low miles, prefer to pay monthly - contract hire* is far cheaper.
New car every 5-6 years, higher miles, cash in the bank to spare - contract hire is stupidly expensive
For something in between, you need to get the spreadsheet out!
*Avoid PCP's they are a way for dealerships to make a killing - PCH is much better.
I used to be indecisive, but now I'm not so sure
|
|
|
Stevie_P
|
| posted on 25/7/18 at 08:04 AM |
|
|
quote:
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.
Believe it or not this was not the case when the other half bought her first focus.
The interest rate on the loan for the car was less than what she was getting in an ISA from the same bank.
Really didn't make sense to me but that was what happened.
The bank? Northern Rock. So that probably explains a lot.........
Steve
|
|
|
ravingfool
|
| posted on 25/7/18 at 01:23 PM |
|
|
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.
|
|
|
wylliezx9r
|
| posted on 25/7/18 at 02:38 PM |
|
|
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.
I spent a lot of money on booze, birds and fast cars. The rest I just squandered.
George Best
|
|
|
B33fy
|
| posted on 25/7/18 at 07:26 PM |
|
|
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.
|
|
|
sdh2903
|
| posted on 25/7/18 at 09:29 PM |
|
|
Pcp = perpetual car prison.
|
|
|
kingster996
|
| posted on 26/7/18 at 08:46 AM |
|
|
quote:
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.
Right now, me.
I run a small business and so it makes sense to have reliable transport and also to have a reasonably presentable car as a good impression when
occasionally visiting clients.
But also, for me, it’s just as cost effective as having a car replaced every 6 years instead of 3 - and I don’t want to run a 10 year old car.
Very broad and basic example:
Buy a £23k new car for cash at £20k with a discount. Keep for 6 years and sell on for £6k. Costs you £14k plus services, consumables, tax, mots,
breakdowns and repairs. Avg cost is roughly £225 a month with the running costs etc.
Hire a £23k new car for £200 a month. Only pay for a couple of services, roughly works out at £225 a month.
The difference is you get a new car every 3 years instead of every 6. But on the other hand you don’t own the car and thus can’t sell to recoup some
cash in hard times.
Other scenario is where you don’t have cash and need to borrow money for a used car. What can you get for £225 a month (including consumables,
repairs, mots, tax)?
Obviously this is open to getting better deals on either lease, used or new, better resale etc and depends very much on mileage and length of
ownership, but personally, I like the certainty of a hire deal and that large sum of cash can be better used elsewhere, like to build a Westy for
example
However, when I hit retirement age there’s no way in hell I’d lease a car. I’d either buy a 6 month old one and run it into the ground or buy
something older for not a lot as per the OP
[Edited on 26/7/18 by kingster996]
I used to be indecisive, but now I'm not so sure
|
|
|
nero1701
|
| posted on 26/7/18 at 12:09 PM |
|
|
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.
|
|
|
Mr Whippy
|
| posted on 26/7/18 at 12:36 PM |
|
|
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
|
|
|
Irony
|
| posted on 26/7/18 at 01:08 PM |
|
|
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
|
|
|
rm0rgan
|
| posted on 26/7/18 at 01:09 PM |
|
|
quote:
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.
In your case, I'd take it as a PCP initially over as long as possible and then refinance the balloon payment as you feel fit....best of both
worlds, you get to have a new car, get to take advantage of the dealers low rates (often only available on lease agreements) and if you find for
whatever reason you don't want to keep it at the end, chuck them the keys! You can still haggle the price by getting CarWOW to provide you with
deals too!
There are some cars out there that you can absolutely lease for less than the depreciation - BMW 140M comes to mind, my son pays £300 a month, no
deposit, 20,000 miles a year over a 18 month term - that's £5,400 for a £35k car that will have lost £10k the moment it rolled off the
forecourt...not everything is like this, but there are some cracking deals out there at the moment.
[Edited on 26/7/18 by rm0rgan]
Sigs are uncool.
|
|
|
Mr Whippy
|
| posted on 26/7/18 at 01:38 PM |
|
|
quote:
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.
Yeah this is what is happening to the wife's Volvo I paid £5k for...a pristine S60 I travelled to the other end of the country to get her. She
never washes it or even takes it to a car wash, has curbed every wheel, inside is filthily with rubbish and food on the floor. Totally unbelievable
to me, my own cars are always spotless. It will come back on her as that's the last nice car I am ever buying her. If I get a new car it will be
for me and me alone and the rest of them will be locked out!
[Edited on 26/7/18 by Mr Whippy]
|
|
|
