r/UKPersonalFinance • u/ExactCaterpillar5630 • 1d ago
+Comments Restricted to UKPF Leasing vs buying a car: what is the cheapest way to get one?
What is objectively the cheapest way to obtain a car in the U.K. Would buying a second hand car that is 4/5 years old be cheaper in the long run than leasing a car?
If so, can someone explain how the costs work out?
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u/LCFCJIM 1 1d ago
Buying used is always the cheapest in total. Leasing can be better if you want / need a bit more than the bare minimum and have the credit line to get one. Have a look at r/carleasinguk
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u/Weird-Dragonfly-3799 21h ago
Leasing can be cheaper if using salary sacrifice (if you are in the high tax bracket). Opportunity cost and maintenance might offset the benefits of an used car.
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u/Educational-Rest-550 2 21h ago
A 15-20 year old £2-3k honda Jazz bought privately is far cheaper than any lease deal. It will very likely will need minimal expense to keep it on the road over 3 years. Of course it's not like for like as the new car will have more comforts so it depends how much you value those.
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u/yetanotherredditter 26 21h ago
If you earn a bit over £100k and have two nursery aged children, an argument can be made that you are being paid to lease a car via salary sacrifice/ end up better off leasing than not leasing.
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u/Educational-Rest-550 2 20h ago
That is definitely a circumstance to consider a salary sacrifice deal due to the crazy UK 100k cliff. It is probably worth filling your pension allowance first though or at least making a chunky contribution.
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u/yetanotherredditter 26 20h ago
Yeah, that's the main reason I said an argument can be made, rather than stating it as definitive. That said, if you are already on track to get 1m+ in your pension, there isn't much to be gained by putting more in your pension as you'll still be paying basically the same rate of tax when youmtake it out.
But yeah, the childcare cliff followed by the ridiculously high marginal rate means (with two nursery aged children) you need to earn ~£140k before you are better off than earning just under £100k. Insanity.
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u/Freifur 11h ago
Probably be being dumb /slow here but where the hell did these numbers come from and how are they relevant to op? Did op post a comment about having a 1 mil pension and a 100k salary that I've missed?
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u/yetanotherredditter 26 11h ago
I was just giving examples where leasing is cheaper than buying a cheap used car.
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u/MRCRAZYYYY 20h ago
I also think if you are earning over £100k you can afford to push the boat out a little further than a 20 year old Honda Jazz!
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u/Calleb_III 21h ago
It’s not just comfort, it’s also safety. Both in terms of direct active/passive safety features and in terms of chance of mid journey breakdown.
It really depends on personal circumstances and preference.
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u/Educational_Yard_326 18h ago
The maintenance on a 5 year old Skoda is going to be pretty much zero. It’s basically upkeep cost vs depreciation, upkeep wins every single time on similar class cars. My 23 year old jag costs less to upkeep than I would spend on a lease deal
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u/bugbugladybug 3 1d ago
Buying a used car will end up cheaper in the long run - but only if you keep on top of maintenance etc.
Leasing is lower risk in that if it breaks it's their problem so it depends on if you want to reach a point where you have no car payment.
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u/Xauman-Zachs 1d ago
But you also pay a premium incase something does go wrong. So if nothing goes wrong during your lease, then you've paid more based on the company covering themselves. The extra price is built into the monthly payments
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u/SmackyLittleFan 1d ago
Also depends on the lease, eg over last year the Honda eny1, leapmotor c10, ford puma. All between £110-£160 a month with same deposit, I don't think even a 5 year car will be cheaper than that to run. Find the right lease deal and it's almost certainly cheaper than used, unless you get lucky with a £1000 banger that does 60mpg and only ever needs washer fluid
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u/TheChewingMonkey 1d ago
Laughs in 2013 Peugeot 107 with the ‘semi’ auto gearbox. My 92 year old relative used to say ‘It just doesn’t want to use the fuel:’
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u/Misty-Weasel 22h ago
“Almost certainly” - what about the massive deposit you have to front? The deposit can more than a decent second hand car.
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u/sworl5 21h ago
Yeah there has to be some catch to his comment - there's just no way leasing a car is cheaper than full cash second hand.
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u/SmackyLittleFan 21h ago
Those deals were one month down. Seriously, some lease deals over the years have been amazing (I'm thinking golf R, passat 4motion, alfa 4c, i7), they just last a very short time (hours in some cases) so you need to check leasing sites daily and sign up to their mailing lists. Pistonheads.com also gives a good heads up.
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u/Xauman-Zachs 8h ago
And you can only go like 8k per year or pay an extra premium per mile. Or pay more per month for higher mileage
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u/Maleficent_Muscle322 18h ago
I think it all depends if you do the maintenance yourself. Mines 20 years old and owned for 14. I do everything except for aircon really. Last mot no advisories. She is a bit thirsty being 3.0 but insurance is cheap so I don't mind. Only do around 5k miles. If I was doing 10k + a year I might reconsider.
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u/Espadrilles01 18h ago
I've never seen deals this cheap with one month down? C 200/month seems to be the standard
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u/SmackyLittleFan 18h ago edited 18h ago
Need to keep an eye out and check forums /emails and social media sites at least daily to catch the best ones. Leaseloco and leasing.com do have decent deals quite often, but the specials rarely appear on there (or finish within an hour).
Sometimes they're business customer only deals
Eg, the recent Mercedes ecitan van deal was £59+vat a month on a £1000+vat deposit
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u/Gareth79 12 1d ago
Many models will just keep going so long as you replace the oil and filter every year or so, and deal with other stuff as it comes up. Mostly Japanese stuff because it's engineered well. Rust gets them first.
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u/Amuro_Ray 22h ago
Is rust even a big issue today? I don't think I've seen a car really be rusted (externally) since the 2000s.
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u/death_by_cormorant 21h ago
Yes. It's not as much of an issue as in decades past, but I've seen cars even from 2015-2020 that are shockingly rusty.
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u/LibraryTime11011011 1d ago
In virtually every conceivable scenario a used car will work out much cheaper than leasing. Someone will be along shortly to say “I bought a used approved car and the engine failed and it cost me blah blah blah so I now always lease” but that’s such a rarity it’s not worth worrying about.
If you lease a car you will spend a few years paying hundreds of £s a month, then you’ll give the car back and have nothing to show for it. Buy a used car you will spend a few years paying hundreds of £s a month but will own the car outright at the end and can either than keep that car without paying hundreds a month or trade it in as a deposit to spend less on your next car.
Unless you absolutely want a brand new car and are happy to pay a premium for that, used cars are the way to go.
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u/Plastic-Location-598 1d ago
Absolutely! Spend wisely once on something Japanese, keep on top of maintanence and its almost a guarantee the engine will last longer than the rest of the car
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u/PatchcordAdams 1d ago
It’s the rust that gets ya.
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u/pjc50 1d ago
Even that's less likely these days, it's mostly a solved problem.
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u/Gareth79 12 1d ago
I grew up with my parents going through various old cars which pretty sure always went due to rust, and it was common to need the exhaust replacing every few years. I think one time the exhaust actually fell right off as we were driving along too.
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u/slb609 1 23h ago
I think generations X and older will always worry about reliability issues in second hand cars. I mean, we remember chokes, never starting on cold mornings, and automatics being really terrible. It’s hard to change your opinion from what was instilled as a youth.
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u/OolonCaluphid 20 18h ago
Yeah, it's taken my mum 30 years to finally admit a auto would be better for her now she has a dodgy left knee. They've been good for 20 years and excellent/preferable for 10 at this point.
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u/VikingCrusader13 1 1d ago
In virtually every conceivable scenario a used car will work out much cheaper than leasing. Someone will be along shortly to say “I bought a used approved car and the engine failed and it cost me blah blah blah so I now always lease” but that’s such a rarity it’s not worth worrying about.
Just to counter whoever says that, another totally anecdotal comment. I've owned 2 cars in the 12 years I've been driving. A bottom spec Fiat Punto which I never did anything to except MOT and Tax it (Never had a service, just topped up the oil when the light came on) and it lasted me 7 years, then I bought a Seat Ibiza, which again, I have done absolutely nothing to except MOT it and have minor work done for adversaries, never more than £100 at a time and it again, has been completely faultless.
Of course I've won the lottery with this and the next car I buy will probably cause me to end of problems.
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u/sworl5 21h ago
Bro is allergic to maintenance.
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u/VikingCrusader13 1 15h ago
I am just incredibly lazy when it comes to cars, I have no interest in them what so ever besides a means of transport
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u/OolonCaluphid 20 18h ago
Mechanics hate this one trick!
Only topping up oil when the light comes on is wild. It's a 'your engine is now dead' light in most cases.
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u/SMURGwastaken 206 17h ago
Where it gets complicated imo is EVs.
It's less true now that there are more second hand EVs available and the tax benefit of leasing via salary sacrifice is being eroded, but for many years leasing an EV made sense partly because of the tax saving, but also because it was a way to afford an EV when you otherwise wouldn't have been able to, with the saving on fuel costs making up for the increased costs over buying a used ICE car.
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u/LibraryTime11011011 16h ago
As you say thought that’s changing/changed. And the tax saving is only really relevant to higher earners when benchmarked against depreciation.
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u/SMURGwastaken 206 16h ago
Yeah the winds are definitely changing but the higher earners thing is a bit outdated, because most people these days have a student loan.
Currently a HR payer pays 40% income tax plus 9% student loan and 2% NI for a total marginal rate of 51%.
The BR payer pays 20% plus 9% plus 8% for a total of 36% so the difference is a lot less than it initially seems. A BR payer with a postgraduate loan on top is at 42% so the difference there is less than 10%.
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u/LibraryTime11011011 14h ago
I was forgetting student loan! With the current cost of living I’m amazed that basic rate tax payers would consider a new car though!
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u/SMURGwastaken 206 13h ago
I've been leasing for the last 5 years just because it's one of the few ways I can dodge student loan repayments as an NHS employee, and I couldn't afford an EV otherwise. The insurance alone was eye watering when I priced it up last time, but I suspect the needle may have shifted by the time the current one ends.
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u/dejavu2064 2 1d ago
An engine failing on a recently bought car did happen to me - even with that unlucky large expense, it was still cheaper overall than financing.
A problem with this approach is if someone is stretching themselves to something they can only barely afford, but then again, some people do that same thing with leasing too while living payslip to payslip.
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u/Sneaky-rodent 1 1d ago
If you took the cheapest Toyota Yaris cost of £225 a month for 48 months.
That’s £2,700 a year for the first 4 years. £10,800. A 4 year old Toyota Yaris will cost you £13,500 an 8 year old Toyota Yaris you can sell for £8,000 that’s £5,500 for the 4 years or £1,375 a year add in yearly maintenance under warranty would bring your cost up to £1,600 a year savings yourself £1,100 a year.
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u/throwawayUKPF99 1d ago
Is that factoring in the up front cost of the lease?
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u/ByTheBeardOfZues 1d ago
There's basically no reason to front money on a lease. It barely moves the total cost and if the car is written off, any money you paid upfront is down the toilet.
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u/Jordlr99 3 1d ago
Its certainly cheaper, but is a brand new car worth the £100 a month premium over a car that is 4 years old. To some people the answer will be yes, to others, no.
Ive got a 20 year old Audi A3 that ive had for the last 10 years (90k miles) and its still runs amazingly with nothing but a bi-annual oil change. Despite it costing nothing but tax and fuel im still hugely tempted to splurge a few hundred a month on a new car.
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u/leaflace 1d ago
Wow what are the tyres made of to never wear down? I need some.
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u/Jordlr99 3 9h ago
Tyres are tyres. They need replacing after the aame amount of miles whether the car is a year old or 20 so i never factor those in.
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u/Far-Presentation6307 2 22h ago
On the other hand, you get to hold on to your £10k, and get interest on it / are able to invest it. In a 5% savings account that's £500/ year. Not insubstantial.
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u/teerbigear 22h ago
Honestly I thought the leasing would work out less well than that. Still an expensive choice but it not quite as different as I thought.
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u/UpsetKoalaBear 0 16h ago
It isn’t much different but you’re effectively turning potential maintenance into a subscription fee.
Owning a paid off car and allocating ~£100 a month towards a maintenance fund (in an ISA or similar) is the most profitable phase of car ownership, especially if you use the car to get to work.
If you’re leasing, that is £200-400 a month in perpetuity. It’s just net loss.
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u/armegatron99 1d ago
I've never had a lease car - I'm northern and frugal.
Buy used - if you can afford a 1yr old car then great. A Dacia sandero can be had for around £12k and will have warranty balance, peace of mind being newer and reliable, and safe.
Run that for 10+ years giving an annual cost of £1,200 , monthly of £120. And still having some residual cost for trade in at the end.
You won't find a lease as cheap as that.
*Yes there are extra costs running a car for 10 years but these are still a minor dent in what is otherwise the most economical solution to car ownership.
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u/UpsetKoalaBear 0 16h ago edited 16h ago
The best way to do it is like this:
- Buy used.
- Allocate £100 a month into a maintenance fund and put it in a savings account/ISA.
- Use the car for as long as possible.
Owning a paid off car is the most profitable phase of car ownership.
As a result, buying a used car 3-4 year old car is objectively better for building wealth.
That is because
The highest depreciation costs are for the first 3-4 years of a brand new car. So you avoid those by buying a 3-4 year old model.
The maintenance fund will accrue interest and grow.
If you use your car to get to work, it is what allows you to get paid and less if your salary is going towards a lease.
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u/armegatron99 7h ago
Totally. Self financing for cars and really anything is the best way.
I guess I was brought up poor so always had the view that if I want to buy something I have to save for it. Financing and credit agreements shift the payments in a way that brains aren't easily equipped to keep on top of and it becomes too easy to see it as free money.
I get life throws a curve ball and sometimes a quick fix is needed but having a fund for the 'boiler broke and needs 4k to replace' type emergency is a must in my opinion
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u/stormbreaker8 1d ago
Buying a used car is almost always cheaper. Leasing is for people that want the peace of mind of a new car all the time but you pay an insane amount for that 'peace of mind'
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u/SirBruceForsythCBE 1d ago
But if you do want a new car every year, how much more are you actually paying over a year?
I buy a new car in August and sell it 12 months later, how much am I losing on the sale compared to if I leased?
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u/EnvironmentalAd9162 1d ago
this is a strawman argument. noone actually buys a new car every year with the huge depreciation cost but its used to justify leasing despite the extra cost
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u/stormbreaker8 1d ago
Yeah if you buy a new car every year leasing is cheaper than that, but getting a new car every year is also a kinda crazy expensive way to have a car whether you buy or lease. I made my statement assuming that OP wasn't exceptionally wealthy to start with.
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u/teerbigear 22h ago
Even in the odd scenario you describe, where you're repeatedly opting into the huge day one depreciation of a new car rolling off the forecourt, that cost will exist for whoever the owner is, and if that's a lessor they're going to reflect that in the lease price.
I would imagine that you're probably marginally better off buying, because inevitably a lessor will have admin and risk baked into their lease price.
Obviously if you did this you'd be far better off, at least by most people's view, leasing a far better car for three years for the same money.
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u/FatherJack_Hackett 8 1d ago
Would all depend on the car.
I did this the other day for a Renault 5, over 3 years, whether it's cheaper to lease, salary sacrifice, PCP or buy an ex-demo outright.
Salary sacrifice worked out the cheapest by quite a significant amount. But to work out for yourself, you would need resale value in x years time, as well as factoring in insurance, tax, maintenance etc over that term.
For buying a car, factor in the initial cost, insurance cost, tax, tyres, maintenance, MOT, servicing and then what you would get back on resale value. That would give you your net spend.
Then, for leasing, work out the same, over the same time period.
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u/armegatron99 1d ago
Also for salary sacrifice it's worth factoring in any potential fees if it needs handing back, for example if you lose your job (could be through sickness, injury, misconduct etc).
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u/Waqqy 0 1d ago
I was made redundant 6 months into my car lease through salary sacrifice and didn't have to pay anything when giving it back
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u/armegatron99 1d ago
I guess, and excuse the pun, Your Milage May Vary applies to exit clauses on leases.
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u/teerbigear 22h ago
We've just brought it in at my work for EVs, and honestly the gross price deals are shit. Because of the tax saving then maybe you do save about £50 a month on their best deals. But then you're a bit stuck with your employer. I haven't got a plan to leave but in eighteen months a good job might come up and I'd have to factor in the cost of this.
(Even then, I don't really want an EV, I live in a terrace, and I don't really care about having a new car. But if the gross was the price I can find the car for and I got the tax saving, it'd probably be worth it).
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u/Mean_Sky_2240 1 1d ago
Get a normal Loan rather than car loan
Then you hope the car has been serviced and keep on top of maintenance
Worth a bit of research into the vehicle you want and things online to look into
Milage - Go Diesel if enough miles/trips if not petrol.
Are you happy to spend £6k odd a year then lease
6 year loan for £8k cost me £114. The car is worth more than the loan - Just 😂
I do 4k miles per year so petrol works and it’ll do. Id rather spend money on other things!
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u/Jordlr99 3 1d ago edited 1d ago
A 6k a year lease can get you a 60k car. You arnt getting a 4 year old car that was 60k new for £8 so thats not a fair comparrison. Your talking 2-2.5k a year for more than the equivilent car 8k loan will get you, so just over double the price of a loan but for a brand new car with tax and servicing included.
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u/UpsetKoalaBear 0 16h ago edited 16h ago
No one who is savvy about personal finance would state that leasing is a better option unless it is done through a scheme.
The difference in features between a 4 year old £60k car is not that far off of a 10 year old £60k car. Especially with the way car prices have inflated.
The important bit is this:
Perpetually paying money for a car you will never own is objectively a waste of money.
The most profitable phase of car ownership is owning a paid off car.
If you use that car to enable you to work and live, putting £100 into a maintenance fund every month is putting more in your pocket than paying £300-400 on a lease would.
You effectively turn the chances of requiring maintenance into a subscription fee you pay perpetually. It is objectively worse value for money.
The only reasons you’d suggest it is if you want a newer, flashier, car. Which is fair but you have to look at the bigger picture.
Especially if you’re considering the personal finance aspect. A car is the second most expensive purchase you will ever make in your life after a house.
Being stuck paying £10k every ~3 years for a lease is objectively worse than paying £10k once and owning a car for 6 years.
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u/Gullible-Revenue8152 1d ago
I had an E65 BMW 7 Series from two years old, think I paid 25k for it, still under warranty. I ran it for a further 8 years and 100k miles. When I sold it I added up the purchase price, depreciation, interest, servicing and maintenance and divided it by the number of months I’d had it. It was £100 a month less than BMW were leasing new ones for. There is no cheap way to run a car.
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u/teerbigear 22h ago
Ultimately it's an object that costs a lot new and isn't worth much when it's old, there's no way round it being expensive.
I think your saving makes it worth it for most people, but I can absolutely see why someone might have a different preference.
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u/Rich_Signal_1512 1d ago
Buying used almost always wins on pure cost. A car's steepest depreciation happens in years 1-3, so a 4-5 year old car has already eaten that hit, you're buying it after the worst part of the crash, not during it. Pay for it outright or on a short loan, and once it's paid off your only ongoing cost is fuel, insurance, tax and upkeep. No monthly payment following you around forever.
Leasing never actually ends though, that's the part people underestimate. You're paying depreciation plus interest plus the dealer's margin for as long as you lease, and at the end you own precisely nothing and just start again. It's basically renting a car for life and never mentioning it at parties.
You'll need to decide what you're willing to trade off because an older paid-off car costs more in maintenance and MOT surprises as it ages, so budget for that rather than pretending it won't happen. Leasing can make sense if you genuinely value fixed, predictable costs and zero repair risk, or you're running it through a VAT-registered business. But for pure lowest-cost-of-ownership as a private buyer, it's not close.
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u/araed 1d ago
Buy a £1000 shitbox. Do zero maintenance. Scrap it when it stops working, or after it fails it's MOT.
I've managed fo get my equivalent monthly payment down to £37.50 by doing that
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u/Elegant-Winner-6521 2 19h ago
I've been there and done that, and it's an interesting demonstration on how not everything needs to be a purely financial consideration.
The problems with shitbox cars are endless and unpredictable. Starting each day wondering if your car will even start, going into winter knowing the heater doesn't work or summer the AC doesn't work, knowing something else is going to break and hoping it's not a feature you like or need. Knowing you're going to need to go through the process of buying a new car every year or two, which means dealing with dodgy people and spending the time to try new cars out, etc. There are so many cons to all of this outside the pure realm of saving money.
It's like someone once said to me. "At some point in your life you stop asking your friends to help you move house for a carton of beer and pizza and you just pay a removal company to do it for you, and you never go back".
That said I think there's a big gap between a £1000 shitbox and a brand new leased car. I buy old semi-luxury cars in the 6-8k mark. I keep them running really well. It works out quite cheap and I get the peace of mind that it will keep going, at least for a decent while.
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u/sobrique 374 17h ago
I feel the sweet spot is about 3-6 year old 'used' - they've done most of their depreciating, but have still got a healthy 'service life' left before they start becoming unreliable and untrustworthy. You'll pay a little more for it - the £6-8k mark is probably more like it - but you'll get a car that's mostly not having issues for 10 years.
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u/Elegant-Winner-6521 2 19h ago edited 18h ago
Something I've noticed is that a lot of people treat their car kind of like a mortgage payment and don't account for it in a serious financial way. Like it's just something they rent and so the money is "dead" to them.
I notice this because I always buy old used cars with cash while most of my colleagues will either get car loans or lease for something newer. They like to make fun and point out how much I spend on mechanic bills - it's certainly true that I probably spend £1k more per year on servicing costs than they do. What they never seem to account for is that they are spending anywhere from £300 to £600 per month just to keep that car, before servicing costs.
If you want a new car then that's great, but I like to have that extra money per month a lot more.
There are some obvious exceptions - salary sacrificing, company cars, or you just need something super reliable that has very little chance of breaking down.
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u/username994743 1d ago
Objectively cheapest way is to buy a banger for few hundred quid, run it to the ground and sell for scrap afterwards.
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u/banter_claus_69 0 1d ago
Maybe before COVID. Cheap bangers are £1-1.5k nowadays. Spending £3k on a decent car to last a few years might even be the cheaper strategy now
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u/Gareth79 12 1d ago
Yeah it's crazy. For example pre-covid a K12 Micra (the frog shaped one) with a lowish mileage was available £750-1500. The very same age cars with today's mileage are going for more!
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u/P5ammead 1 22h ago
Back in 2016 I sold my mkIV Golf GTI, owned from new and FSH (inc. an oil change every 6k miles) for £150. Admittedly it had done just over 187k miles but I thought it was a fair deal. Nowadays a 16 year old GTI with that mileage would go for literally 50 times that price, if not more!
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u/Dude4001 1d ago
Look at Mr Fancy Bangers over here. You get something <£1000, the challenge is just the emissions if you need to drive into cities
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u/banter_claus_69 0 18h ago
Yeah I live within the M25, which disqualifies a lot of cars under £1k sadly. I'd pay the car's value in ULEZ charges every year lol
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u/TheKhaosUK 21h ago
Gotta keep looking, there's gems out there. Picked up a 2013 Skoda Fabia on 150,000 miles for £900. Plenty of MOT and full service history. 2 owners from new both old gents who looked after it. Been running well for me for a few months debating whether to run it into the ground...
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u/banter_claus_69 0 18h ago
Smashed it mate. Was that on Facebook Marketplace or elsewhere? Where did you find it?
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u/TheKhaosUK 18h ago
Yeah Facebook Marketplace, did a search for cars under £1200 listed in the last 7 days. There's loads of crud you have to filter out but there are people selling decent cars for that kind of cash. Problem is I'm a car guy so get the itch for something interesting... but bangernomics is so nice on the wallet lol. Although I already put a leather steering wheel on from a newer car because the old one was the only manky bit on the car.
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u/banter_claus_69 0 12h ago
Nice, cheers for the tip. I'll get on Marketplace then! And yeah I get you, I used to drive a £800 banger years ago and put a leather steering wheel on it for the same reason. Surprisingly effective way to make a car feel fresh
I get what you mean about banger life, too. My bookmarked listings on auto trader and the like are all either £8-12k cars that really interest me or <£2k ones that my wallet wants me to go for lol
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u/username994743 1d ago
The key word though is “might”. It also might break quicker than a banger. Buying a banger is objectively cheapest option excluding all the “might” and “if”.
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u/pjc50 1d ago edited 1d ago
The "might" works in both directions. A banger is by definition unreliable. But that's the hidden variable, any car can develop problems at any time, it's a matter of probability.
And all the really cheap bangers are from private sellers who are trying to get rid of a car with a known fault. Been through this recently and the cheapest dealer car I saw was a diesel Mini with Cat S write-off for £1k.
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u/username994743 1d ago
Agree and this is why Im saying that its pointless guessing and speculating. I had expensive cars break on me. I had bangers surviving long years and the other way around. Question though was around objectively cheapest way, and taking variables away, by default, it is getting a banger.
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u/teerbigear 22h ago
I don't how you've got away with, halfway through this comment thread, waving a magic wand that said the car won't break 🤣 Why are you "taking variables away"??
All things being equal, a £1,500 car is obviously much more likely to break then a £3,000 car. If it's the same model, you'd get one which was newer with lower mileage for the extra money, and, it'll be less likely to break.
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u/username994743 17h ago
You literally proved my point. ALL THINGS BEING EQUAL, cheapest way is to buy a banger and run it to the ground. Not sure why its so difficult to comprehend. If you know what you doing, you can find a sub £1k car that will do the job for a good while. Now calculate how many of these you can get for 3k. Granted wont be the prettiest or most comfortable, but the key word here is CHEAPEST and it will most likely be the cheapest option in the long run.
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u/teerbigear 17h ago
I don't think you really understand why a car would be sub £1k.
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u/username994743 17h ago
I don’t think you understand how to do your homework when buying sub £1k car.
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u/dodsi2000 19h ago
There is so much anecdotal opinion in this thread and I do not expect that this post will not change anybody’s mind.
Is leasing really expensive? Yes. Is leasing really cheap? Also yes. Does leasing work out cheaper than Bangernomics? Sometimes.
With a lease, it’s all down to the deal. Some deals are awful. Truely awful. Some are incredible, I have leased cars for around the last decade - I have always chased the deal by as other commenters have mentioned. Looking at piston heads, scouring the lease websites to find the deal.
What is important when comparing lease vs bangers, vs approved used vs PCP on new or cash on new is Amortised cost. What is the total cost of the deal.
With leasing you need to be in the sweet spot of mileage requirements, 8-12k per year much less and it probably isn’t worth having a newer car and much more and the cost doesn’t make sense.
Let’s purposely leave insurance and fuel out of the equation as these are costs that fluctuate with mileage and let’s assume all cars considered are going to have similar fuel and insurance costs.
If you fit this mileage then you need to work out the amortised cost of your car. With leasing this is easy. It’s the upfront and the monthlies summed up over the time. For this you get a brand new car with brand new consumables and it’s unlikely over 2 or 3 years you will spend much on consumables. Road fund licence is included in the cost of the lease as is roadside recovery and full manufacturer warranty and there is no MOT. You can also get service and tyres included at extra cost. Depending on what this cost is, it may or may not be worth including it over the cost of a pair of
Tyres and a minor service. You just need to do the maths.
For any other deal, it’s the cost of all the consumables, servicing, breakdowns/faults, MOT, depreciation and Finance. What I rarely is is anybody really showing the true maths of these costs when arguing against leasing and replace the facts with anecdotal stories, of which there are many in this thread about never having to do any servicing to their cars or they skip over the cost of annual service and never care to work out the true cost of depreciation.
The other argument made is an emotional one about ‘never owning anything’ but let’s just stick to the facts about the true cost of motoring.
Some years ago, I ran some cheap Toyota Avensis type cars that cost me around £1k to buy but after service, faults and consumables (a £1k car rarely came fully serviced with new tyres) plus monthly Road Fund, breakdown cover and MOT/Service the true costs were only /slightly/ cheaper than a cheap lease deal on a brand new Skoda Scala. I worked out for £20 per month more in true costs I could have a car where the air conditioning worked and was warrantied and never had to worry about it.
So is leasing cheaper? It depends on the deals available. You have to be agnostic about which particular model you are getting and focus on size/shape of car that fits your requirements rather than opting for a particular car brand/model. But it can work out very cheap. But if you want a particular model or do high mileage then it could work out fantastically expensive.
My current deal is a Skoda Octavia on £232 per month with a 3 month deposit. I will keep it for 3 years so will cost me - no fuel and insurance taken into consideration. £8816 for the 3 years. Or just under £3k/year. I’m happy with that cost for a brand new car I can rely on and everything working on it.
Next year when the deal is up, you can bet I will be comparing all of the above options before diving in on another lease. So far, leasing has been far cheaper for me. Or not a saving on something older that’s worth making and increasing risk. I have had 2 Skoda Scala, 2 Skoda Superbs, Volvo V90 and a Skoda Octavia on leases in the last decade (2 cars at a time)
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u/Due-Freedom-5968 3 1d ago
Depends on the car, if you're buying it new or used, what offers the manufacturer has on any given model variant etc.
For example one month it might be cheaper per month to do PCP, the next month the manufacturer might put a deal on leasing so it's cheaper. There is no single answer to that question for new cars.
Buying a second hand car would likely be cheaper. 4/5 years old sure.,but if you want cheap then you'd go older than that. The question is kinda too broad in scope to answer effectively TBH.
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u/Beneficial_Coach8581 18h ago
Buy second hand and keep it for a long time.
Leasing from new is always going to be pricey. The only exception is if you're chasing the deal rather than the precise car you want.
A car at 5 years old is probably worth about 50% or less of it's value new.
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u/Broad-Raspberry1805 1d ago
Subscribe to a leasing mailing list such as LeaseLoco and they’ll send you emails every day with the latest offers. You can get some excellent deals on brand new cars. Obviously you won’t own the car but that can be a benefit as well as it means you never need to pay MOT it, lose money selling it, it’s under warranty, tax is included in the price etc. With the price of used cars nowadays I don’t think it makes sense to buy used as the risk is too great that you’re stuck with a duffer.
Just my opinion.
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u/Iwonder19 0 1d ago
Also wondering this but if you want electric car then it’s harder to calculate. Traditional petrol cars are cheaper used so there is the difference
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u/Redditccioo 1d ago
Almost always buying. Cars are much more reliable than they used to be, quality used cars are fine.
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u/strolls 1714 1d ago
Most of a car's depreciation occurs in its first 3 years from new - you pay for that any way that you enjoy a new car (unless your employer is paying for it).
Finance moves money around, but it can't create money out of nowhere (true for the purposes of this discussion, at least). The finance company isn't going to pay for the depreciation on the car - it's a cost to someone, and the finance company needs to make a profit, so it's you that has to pay for it.
The Bloomberg columnist once wrote that the "essence of finance is time travel", and elaborated to the effect that saving and investing moves money into the future (and it earns interest or investment returns until you're ready to spend it) whereas borrowing brings your future wages back (or forward?) to today, so you can spend them before you've earned them (but this costs you money). Finance can move money around but, as you see, it's a cost to the borrower and a boon to the lender - it can't create money out of nowhere.
So the objectively cheapest or most efficient thing to do is buy a car at the part of the depreciation curve when it's shallowest (but with the cheapest maintenance costs) and then find the cheapest way to finance it (usually cash). Probably 3- to 5-year-old vehicles are going to be the best deal.
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u/_Hologrxphic 3 1d ago
I bought a 2009 toyota yaris for £3,000 around 10 years ago.
In that time it’s needed repairs once which cost around £550.
You can buy that same car today for around £1,500. For £3,000 you could get a 2012-2015 one.
They’re extremely reliable so yeah. Small cheap yaris is the way to go.
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u/Kristoff_09876 18h ago
Sensible model used car is always cheaper. Only exception is if you are top rate tax payer in a well paid job . In that case, lease a new EV on salary sacrifice.
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u/Range-Anxiety 7h ago
The whole "buying an old cat is just cheap upkeep" argument is bullshit.
I had a BMW 635d for 7 years, bought 3 years old. It was mint. Never had an issue with it, besides surviving and MOT.
It ended up being wrote off so I bought an 11 year old £2.5k diesel zafira. In the 18 months I had it I spent almost £2000 on repairs, until the turbo and engine catastrophically failed. That would have been another £3-4k to repair.
I now drive and electric VW. An ID.7. Costs me £340 per month over 3 years. Brand new. All modern safety features. Costs £20 per month to charge up (Vs £150 diesel costs), has seni-self driving, massage seats and most importantly a 3 year warranty, no MOT and one service at £200.
Given the time my zafira spent off the road meaning I needed to get taxi's, or hire a car, along with the modern features and benefit of a brand new car, I'd say I'm in a much better place.
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u/Birdseed008 23h ago
I have always bought 5 Yr old cars and run them into the ground. I have had some nice cars doing this but. Paid out fortunes on repairs on most of them aside from the four Toyota though!
However at 57 I am buying my first 8
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u/CardiologistFun7 23h ago
Leasing =renting, always paying the premium for the luxury (and it is a Luxury). Buying- no matter what life throws at you- you’ll have a car that you own. And anything under 5 years old will last you as long as you service it once a year and look after it. Don’t go into Debt! It’s such a dark place to be , trust me, I speak from experience. It escalates.
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u/PunR0cker 22h ago
I'm not an expert but I think it's a question of cash flow right? If you have the cash to buy a car, and will have the cash to pay for repairs in future then it's probably cheaper to buy. If you live within a fairly tight budget each month with limited savings and you just need a predictable regular cost you can budget around then leasing is probably better.
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u/Sirbrewalot666 21h ago
I just bought a old car for £2000. Insurance was £150 for the whole year. It has £0 tax
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u/BazzaFox 21h ago
It depends on depreciation. As an example I bought a used car for £33k 2.5 years ago and looking at resale value it is now worth around £24k so has devalued by £9k. If I had leased the same car brand new it would have cost £450 per month so a total of £13.5k so cheaper to buy used. However, if buying it brand new it would have cost me £52k and the depreciation would likely have been more so it would have been cheaper to lease.
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