Leasing Vs Purchase Bank Loan

Jez · 18 Dec 2019 at 13:27

Indeed, i rarely have any issues with my older cars. This said i was being realistic, while i would personally buy a stupid old Range Rover or something, i was suggesting a basic VW Polo, Golf, Ford Focus, something simple of that ilk.

bainbridge · 18 Dec 2019 at 14:16

Buying also means you don't have to worry about mileage and modification restrictions, which might not be a concern for many but it was for me.

Spleen Sauce · 19 Dec 2019 at 09:06

I had been in the PCP game for years, and made some silly decisions when upgrading early etc - so completely different situation to you - but I decided to go down the bank loan route at 2.8% and buy a 3 year old car outright. Loan will be paid off early with no penalty and I'll own the car, job is a good'un. Took a while to realise that I cared a little too much about having the latest and greatest, whereas I decided to actually find something cheaper that ticks the boxes of the things I both really need as well as the things I really wanted (decent economy, bit of fun to drive on a twisty road occasionally, cheap tax and insurance, decent infotainment and good audio system).

TLDR - my advice is to list out the things you absolutely must have in a car, find the cheapest option that ticks all of those boxes and buy that with the cheapest bank loan you can get your hands on.

Buffman · 19 Dec 2019 at 21:56

Can also consider buying on a 0% crredit card. I bought on 4 cards and swapped 2 of them (11kish)onto 0% card.

Will vary on seller if they take Cc (often they dont).

[TW]Fox · 20 Dec 2019 at 07:55

AiiR said:
The advantage of the lease is the opposite in that you don't own it. The lease company takes all the risk on the value,

Except they are experts in this, so who do you think wins?

Basher · 20 Dec 2019 at 08:38

AiiR said:
The advantage of the lease is the opposite in that you don't own it. The lease company takes all the risk on the value, for example if you buy a diesel and then in 3 years the demand for them dries up due to stricter regulations.

If new I'd much rather lease than a bank loan.

The risk is built into the price, it's not really the finance company taking it. That's why they have strict mileage restrictions - to limit the risk.

Hades · 20 Dec 2019 at 11:39

I recently leased despite always saying I wouldn't. I agree it's often an expensive way to run a car. But I'd had a series of issues with used cars. My Golf had an engine failure at about seven years old. I was planning to keep that for many more years but that was an unexpected large expense. It hadn't been very reliable despite owning it from when it was two years old (a long list of issues - far longer than previous cars). Although depreciation was now small, the repair costs were mounting and becoming annoying. So I sold it. I looked around for a newish replacement and found the condition of a lot of nearly new cars really wasn't that great unless I spent almost the same as a new car. So I have been driving a free (inherited) Peugeot for nearly a year which meant my costs have been minimal during that time. Then a really good lease deal came up on a car I'd considered in the past but dismissed for several reasons. But it was too good to pass up and it meant I could try an SUV, which is something I don't know whether I'll like, without being stuck with it long term. I will probably move back to owning next time but I thought I'd give it a try.

I think that good deals can be had on lease cars. But you should have a list of cars you're interested in and only go for one if a strong deal appears. Also don't get too fixated on colour and options because the good deals seem to be on specific colours and options (quite often the base spec as they want it to tempt you in to paying more for the model above).

I always said I wouldn't lease.
I always said I wouldn't buy a diesel because they may become hard to re-sell soon.
I always said I didn't want an SUV as I prefer smaller cars.
I always said I wouldn't trust Land Rover ownership due to them being unreliable, especially outside of a warranty.

So obviously I ended up leasing a diesel Evoque

One good thing about the lease is that it has allowed me to rent a car I would never have wanted to own (due to it being a diesel and being a Land Rover). But in a couple of years I'll just hand this back. If I find I don't like an SUV then I will just buy something else next time and it's allowed me to decide whether I actually like this type of car. I also have no unexpected costs. The overall cost is indeed higher than buying a cheap used car but I know exactly how much it is costing me every month. So it's probably more expensive than a cheap old car, but does seem cheaper than buying something similar brand new.

I will probably move back to older ownership next time but this suits me for now.

Basher · 20 Dec 2019 at 12:21

Hades said:
So obviously I ended up leasing a diesel Evoque One good thing about the lease is that it has allowed me to rent a car I would never have wanted to own (due to it being a diesel and being a Land Rover). But in a couple of years I'll just hand this back. If I find I don't like an SUV then I will just buy something else next time and it's allowed me to decide whether I actually like this type of car. I also have no unexpected costs. The overall cost is indeed higher than buying a cheap used car but I know exactly how much it is costing me every month. So it's probably more expensive than a cheap old car, but does seem cheaper than buying something similar brand new.

I will probably move back to older ownership next time but this suits me for now.

Out of interest, what kind of deal did you get? Land Rover are offering some pretty fruity discounts from new (we just bought a brand new Disco Sport) so PCP deals are actually pretty strong at the moment with them. Ours (P200, R-Dynamic SE with a few options) will be around £400 a month.

[TW]Fox · 20 Dec 2019 at 12:28

Seems like it's overpriced from new, 400 quid a month for a 4 pot Freelander seems expensive still.

Basher · 20 Dec 2019 at 12:38

[TW]Fox said:
Seems like it's overpriced from new, 400 quid a month for a 4 pot Freelander seems expensive still.

Definitely overpriced at list. But Expensive compared to what?

[TW]Fox · 20 Dec 2019 at 13:21

Basher said:
Definitely overpriced at list. But Expensive compared to what?

Similar cars, ie Dacia Duster.

AiiR · 20 Dec 2019 at 13:24

[TW]Fox said:
Similar cars, ie Dacia Duster.

Bit harsh on the Duster there

jpaul · 20 Dec 2019 at 13:34

courtesy of hotuk ~£350p/m 8k evoque
https://www.newcarcontract.co.uk/pe...150-r-dynamic-5dr-manual-start-stop-539458358

Basher · 20 Dec 2019 at 13:46

[TW]Fox said:
Similar cars, ie Dacia Duster.

Hades · 20 Dec 2019 at 14:37

Basher said:
Out of interest, what kind of deal did you get? Land Rover are offering some pretty fruity discounts from new (we just bought a brand new Disco Sport) so PCP deals are actually pretty strong at the moment with them. Ours (P200, R-Dynamic SE with a few options) will be around £400 a month.

Approx £240 a month for two years and 8k per year, £1500 or £1800 initial payment I think. Poverty spec Evoque D150 R-Dynamic (the latest revised model just released). It was definitely a good deal at the time but expired now. It's basically the one listed above by jpaul but a little cheaper. It was a big jump to add options so I just stayed at the basic spec.

Although it's poverty spec (2WD, cloth) I'm seriously impressed with it.

EDIT: I added Android

!bluetonic! · 21 Dec 2019 at 20:19

MSE Credit Club

Experian based. Soft searched done to show you your potential Loan deals.

Awesome.

Skynet5 · 22 Dec 2019 at 08:17

Spleen Sauce said:
I had been in the PCP game for years, and made some silly decisions when upgrading early etc - so completely different situation to you - but I decided to go down the bank loan route at 2.8% and buy a 3 year old car outright. Loan will be paid off early with no penalty and I'll own the car, job is a good'un. Took a while to realise that I cared a little too much about having the latest and greatest, whereas I decided to actually find something cheaper that ticks the boxes of the things I both really need as well as the things I really wanted (decent economy, bit of fun to drive on a twisty road occasionally, cheap tax and insurance, decent infotainment and good audio system).

TLDR - my advice is to list out the things you absolutely must have in a car, find the cheapest option that ticks all of those boxes and buy that with the cheapest bank loan you can get your hands on.

This is exactly what I chose to do a couple of weeks a go.

My 5 series is pretty much immaculate 3 year old car with 12k on the clock for under 20k.

I could have paid in cash, but got a bank loan for 3.5% for the lot over 5 years and will overt pay and get it done in half that time.

Hoping for many happy years driving and will run it till it costs more than it should.

I cannot see me needing anything else in 10 years. And then I imagine my next car will be all electric.

Jonnycoupe · 22 Dec 2019 at 13:54

[TW]Fox said:
Seems like it's overpriced from new, 400 quid a month for a 4 pot Freelander seems expensive still.

new platform mate, thought that would be right up your street. Kthxbye

FishLicker · 22 Dec 2019 at 15:09

Jez said:
If you've managed completely without a car for some time, then it sounds as though your usage will be borderline optional and for convenience only?

In that case especially i really do not see why you would wish to borrow for the car, or at the very least if you must borrow then why not buy something a bit older for a few thousand and keep the car a non issue financially?

The OP sounds similar to me, albeit I’ve been without for 15 months, and it’ll still be another 3-6 months before I’m in a position to buy, but I am of the same opinion as you, just buy a cheap car outright, stick a couple of hundred a month in a savings account (for repairs, insurance etc), it will work out far cheaper in the long run and it’s still possible to get some very nice cars for under 5k. Even if you didn’t want to save, assuming a half decent credit rating, you could just buy it on a 0% CC and just pay it off asap.

Daff_Duck · 22 Dec 2019 at 22:13

From the other side of the fence . I have always as the OP bought cars on very low APR. Over the years I have had @15 cars from Audi to Peugeot. In all cases at some point repairs or unexpected costs are incurred. Audi in particular cost me £1000’s due to a design flaw

At the moment I now have a car which I own but need to get rid as things have started to go wrong, and I am seriously looking at PCP manly due to the fact you know exactly how much you are paying out, especially seeing as I need a car for work as field based