Costs of BUYING & KEEPING a USED CAR compared to LEASING A NEW CAR

Liked and subscribed, never considered lease, I’ll investigate your channel, many thanks.

I've had 2 new cars on PCPs. Never had to buy a new tyre. Following your no. crunching videos, Jim , I've decided leasing is even better than a PCP. Keep your vehicle fresh - no MoTs, tax, tyres, better mpg, lower insurance, (yes lower insurance on a newer, safer car) - & your costs known. No worries about depreciation, & keep your cash invested elsewhere. It makes so much sense for not very much more, or maybe even less, when you add the unknown maintenance and repair figures in to the mix. Thanks Jim. Your spreadsheets are filled with common sense.

Well explained video, Explanations are really good it authenticated my thought process with actual figures and helps in clearing the cloud around deciding what is best. Thanks

Running two interesting 2018 cars at present. Depreciation is reasonable, tech is still ok (matrix LED’s HUD, adaptive cruise etc), lower road tax and insurance, both have only needed scheduled maintenance so far too and both have warranties for the unexpected. Would still prefer a new car obvs but can no longer justify it.

Nice job Jim. Couple of points to consider, the leased car would still require a warranty in years 4 and 5 and there is also an opportunity cost on the monthly lease payments to some degree.

Nice unbiased information that actually helped me understand the process

Great video Jim.

Suggestion for your next video, comparing a 10 year old luxury car ownership for 3 years or 5 years vs lease.

In my experience with a 2013 E class mercedes. Total cost per year comes out to be 1600£ per year factoring in depreciation and repairs. Roughly 133£/month. At this kind of money per month, i wont be able to lease. Certainly would be using the bus. 😅

Surely a fairer comparison would be a new leased car for 3 or 5 years compared with the same car bought new then traded in at the end of the time period. That way it is like for like. I will do this myself and will not forget to allow for the loss of savings interest on the cars cost to buy (at 5.2%)

Great advice. Considered leasing but after lots of research decided to bite the bullet and just paid cash for a 2021 Kia Soul EV £15k for our new family car. I think im old fashioned and wanted to have a fave to face interaction with the local dealership, give a thorough test drive, have a bit of a haggle and part ex our old car. Happy now hopefully still happy when we come to sell it. We had our last car for 17 years so who knows. Great vids.

I guess another point worth mentioning is that not many people are lucky enough to have savings lying around to buy a 2yr old car with cash, so may take a personal loan to cover it. That would typically be at a higher interest rate over the three years of ownership. So they'd actually be paying maybe 7.9% on top of their purchase price, or the majority of it. I don't know what today's loan rates are but that's a guess.

One thing that is always a bit irritating at the end of lease is the charges for damage.

My A5 after 3 years look perfect from a distance but I know there are a few car park door dings on it, a small scuff on one wheel and a scratch on the door and bumper. Most of them you have to duck and dive around to even see 😂

Now you will be very lucky not to have these sort of things after 3 years but you often get charged for them as the reasonable wear and tear guides are OK but strict.

I think it's worth noting that more often than not you will be liable for some charges on end of lease.

Having said that I rang up with my last car and complained at the number of tiny little things I was charged for and they removed most of them.

Just think it's worth mentioning as if you were buying second hand you would probably ignore small scuffs and dents you couldn't see from a metre away.

Great video, I've always done the 2 year old and keep for 5 but never tried to put numbers on it.

Interesting 😊

I've never leased a car , I buy 1 or 3 years old , cash , but will lease my 1st EV .

My current preference is to buy fully depreciated premium cars and find the model years that avoid any show stopping jobs - Range Rover Timing Chain, Porsche IMS+Bore Scoring, BMW Injectors etc. It's cheaper than most leases and I get to drive more interesting cars. The thing that really dates cars is the infotainment and that is a cheap fix most of the time. Currently in a super cheap BMW 6 series and I absolutely love it!

Great video as always. 100% you have to do the calculations yourself based on circumstances. Making the right choice of vehicle is number one. I've not leased yet, but based on current conditions it certainly looks like a winner for many. I was very lucky with last car a 2014 Mini Cooper S 3door Hatch. Bought 5 years ago for £12k5 and sold privately on Facebook for £7k9 - it was a beaut. I think that was pretty cheap motoring :). I've switch to electric as I wanted to do and picked up again of Facebook a 2021 500e LaPrima for £12k8 about 3k below dealer retail so I'm hoping I have a bit of a buffer on the inevitable EV depreciation bomb. Time will tell.

Good one Jim. You can't beat a spreadsheet for life's decisions😄

Thank you, I am considering a fairly newly released EV (Tesla Model Y) so finding this hard as I can’t put a value on it at 3 or 5 years old.

Super video once again Jim. Great to see the comparison in black and white. Throw in some tyres and brakes and the lease option looks very tempting indeed. Thanks for making this Jim 👍🏼

How much would you typically budget for cosmetic repairs/touch ups to a lease before you return it? Tricky to factor in, like used maintenance costs/servicing but something to consider... Interesting video as always 👏

There is a fantastic lease deal on the ora 03 about

Great video. Thanks for the info. My budget is down the lower end of leasing/buying second hand and I’m trying to weigh this up myself.
Do I buy second hand from a more reliable brand (Japanese) and hope I’m lucky RE repairs or go for the known costs leasing will give me

Also I’ve noticed a lot of new cars are higher insurance group and with insurers taking the p*ss that’s a factor as I’m in my 30s.

As a car guy I would never lease because I'm a bit sad and actually enjoy the thrill of the hunt when shopping around for parts and doing some of the simpler bits myself, having some industry knowledge will save you a small fortune on servicing costs especially if you can fit them yourself. Changing brake pads/discs, replacing the odd sensor or changing the oil isn't rocket surgery and is an essential skill of car ownership in my view. All my cars have been 15-20 years old 100k+ miles and still going strong because I've looked after them.

19 GRAND CAR AS A LOW PRICE?

Other than a couple of rare cases I buy cars at least five years old to start with. My current car is an 62 Reg Mercedes SLK. I paid £11200 for it in July 2020 and now I could probably still get £7500 for it. I've only had routine servicing at a specialist and a couple of tyres in that time (disks and pads will be required in a year I expect). The other plus of older cars is cheaper insurance. The downside is many people want something new and don't consider a ten year old car but buy a good one and look after it and it's the cheapest way to go. If you don't service it regularly that's when the problems often start. I like your videos and the fact that you take lost interest into account when working out costs - it's quite a lot now that 5% is possible on a deposit account.

A well explained ownership video Jim. I’ve done a mixture over the years, owning and leasing with varying success. Your right doing the sums is absolutely crucial, but I know a lot of people when talking about cars forget about depreciation.

👍

👍

Looking at those costs I would say leasing is better. I have always bought 2 to 3 year old cars and kept them. My current car is a 2016 kia ceed I bought in 2018 for £8300. No tax on it and a 7 year warranty. At the end of the warranty period it was worth about £5000. So annual cost of about £1100. But I still have it but no warranty any more

My nine year old vw Passat estate just got a door ding in the pub car park and the culprit was long gone when I discovered it. Annoying as it is, I’ll probably just live with it whereas if it was a lease or PCP, it would cost me a good few bob.

Leasing model relies on the second hand market. If it can't be sold on so the leasing company can recoup costs, leasing rates would have to increase significantly.

Agree with your view point that you go with what your comfortable with. Personally I've bought and run 2 cars for over 10 years each. One was a year old when purchased and another brand new. I may have been lucky as I've had no issues that have been costly once the warranties expired. Love your channel and videos but leasings not for me....although some of your special offers are tempting 😉

I think you missed the trade in. If you do the same again and your car is worth £8 or 9k your 2 yo car is now costing you £11k to buy! Not applicable to everyone, but I wouldn't let anyone other than myself put a spanner near my car. 😉

One point you missed is that if you lease in your own name and get divorced, then there is no asset to split. If you buy and own the car, the value is lumped into the joint pot and then divided. I found out too late. My ex leased and kept her expensive luxury car while she demanded half the value of my modest family hatch back.

ET cetera. I love the videos though, please keep them coming.

Simple maths, lease for £300 per month for 3 years plus upfront payment, and still, it's not yours versus even at the end of lease they charge for every small mark as a smart repair, costing £70 each repair.

Used car

Even if you spent £300 each month for 6 on repairs, you save a small fortune, and the car is yours.

You should not be comparing a mild hybrid with non mild hybrid

Really useful Jim 👍

Good video Jim. A lot of people dont realise how cheap leasing is.
As for the 'I buy a £700 car and it lasts me forever ' crew, they ain't comparing like for like. If they want to drive an unsafe sh_tbox thats their choice, good luck to them.

Interesting. It is close thing lease or secondhand. It has a lot to with which car you chose. The Maths must done .

With second hand prices on something like a model 3, these numbers can be a lot better.

👍👍👍. Thanks Jim

Interesting stuff, thanks.
I did a similar calculation last week, just as the company I work for does salary sacrifice option to lease an electric car. comes with free insurance, maintenance, tyres, tax and breakdown cover. Looked at something under £400 , best I could get was a Toyota bz4x for £350 a month , out of a load of Nissans, BYD and MG cars that were less but not as attractive. Have a Mercedes 2020 B class now. Has lost about £8k in the 2 years I've owned it. Only do about 5k miles a year. Kind of works out the same when you factor in maintenance,mot,etc. Just I get a Toyota instead of a Mercedes, but a New rather than 2 year old used. I kind of prefer having a Mercedes to be honest and I like that I have £19k there if the worst comes and I have to sell it. Not having to think I need to get £350 each month for the next 2 years taken off my salary.
Swings and roundabouts I guess,

I've always run second hand cars (2-5 years old) since the 1980s. They've been largely reliable (an Austin Princess and old BMW 7 aside). The obvious thing to say is to check the car's history, and look after it well, including any remedial mechanicals that may need doing.

Warranties are not worth a rub, so why include it ? Your better off with a maintenance plan, such as what Toyota are offering. Up to 100,000 miles.

Had a qashqai as a hire car in Spain last week. Must say, I loved it. Shame the arriya isn’t quite an exact replica but electric (ie it has a smaller boot)

I buy a 2 year old used car and drive it until it dies. I'm currently on my 2nd car with the first car lasting 18 years. I'm probably a unique case which it shouldn't. I should be the norm.

I agree we lease though motorbility and you can't bet it

I bought a pre reg (7 miles on the clock) BMW 530d Touring on 18 Jan 2018. List price 57k and I paid 27k (imagine getting the same car today at that price!) So over 6 years old now (it came with a paid for service pack for the first three years). I’ve only had one repair so far (failed suspension air bag cost £275 last week) and it’s still worth over 20k as I’ve only done 35k miles. Passed every mot first time, not even an advisory. Cheapest car i’ve ever owned and the performance is stellar.