As expected Jim, a clear and easy to follow spreadsheet of how to compare all types of car deals. Trouble is people fall for the the headline cost figure spouted by salesman and dealers alike. My last four cars have all been leased and I followed a similar principled approach to this and leasing always came out on top. If you follow the above approach and do the math chances are you will get the best deal. Well done Jim 👍
Cheers Dave - all I want from these videos is for more people to dig a little rather than blindly doing what they've always done just because they've always done it
Very interesting. I normally buy cars cash because of the flexibility it gives me to change whenever I want, but I end up keeping most for 4 to 5 years! I did buy a GR Yaris on finance (£299 per month, bargain!), but as that was a desirable car it hardly cost me anything over the 2 years I had it. With interest rates rising, the opportunity cost would make me reconsider cash. It would be interesting to see these figures for a "high-end" brand like Porsche. Thanks.
Jim, I’ve been an advocate for leasing brand new cars for years…. People have always commented on my affordability of a new car over a 2nd hand…. Last year, I made the biggest mistake in my life and was forced to buy a used car. In that period I have spent more money on fixing the car and petrol over a new car! I won’t be making that mistake again… I understand car enthusiasts or people who are ( or who knows ) a mechanic. For everyone else, it’s a massive gamble. I much prefer to know where I stand with my money each month and leasing (with the maintenance option) is the wisest option. Thanks for vid’s….
I normally buy new cars and keep them for 15 years, I bought a brand new December 22 reg Seat Leon Estate ES Dynamic 1.5 for £21, 000. I do my own services and rust treatment, few £ for the ACF50 and £55 for the OEM oil and Filter. I clean the car weekly including the brakes and calipers. I was lucky I ordered the car prior covid on a fix price basis and ended up saving £6000 on a similar car on the day I received it a year later.
I buy cash as monthly payments affect the ability to save fast for other investments or a new car in say 5-7 years time. I was always told the monthly payments are the biggest wealth killer. You want as little of them as possible. Opportunity costs are always a bit of a guess. The chances are if you're buying cash you're probably going to wipe that difference out very quickly with the ability to save at a faster rate. Everyone is different.
In the meantime you’re losing 5% per year on your cash (at the moment). People who don’t understand finance and make bad choices could easily have it suck their wealth; those who do understand it and how take advantage of it in the right way can do very well. Each to their own.
Buying in cash a used 3 year old well looked after quality car and keeping it for 6 years ( ie 2 PCP cycles ) is the best financial decision you can do as private buyer. you save 50% off MSRP ( if not more), you save on finance charges, you have no monthly payments to worry. Leasing cars in perpetuity is not really clever unless you do not plan to own a car again after the end of the lease.
@@DefinitelyNotAGuru unless it's a 3 year old Toyota with 7 years warranty remaining on it :p I did the maths too and for me it was lease if you want new and no hassle but buy used approved and hold for 8 years at least to maximise value. Oh, and get a Toyota.
@@thegoodraj agreed, a Toyota is solid as second hand buy. They last long often with minimal problems. It’s scary though how much money you lose on a new car…on the Skoda superb example, the car lost nearly 8k just for being pre registered with 10miles…
@@staceyismine great point but quite the opposite, a house appreciates in value and a car depreciates. As Warren Buffett says “buy appreciating assets, rent depreciating assets” he’s worth about $145Bn.
Hi Jim love watching your videos, I’m thinking of leasing my first car, so totally new to this please can I ask when I make the first down payment for lease do I only pay the down payment figure to start or I should be expecting to pay the down payment plus the documentation fee as well ? Thank you
Very informative video Jim, its all down to mind set at teh end of the day. I'm near retirement and looking for a new car to hopefully have some worry free motoring and now after 50 years of always wanting to own the car a lease would mean I don't need to take a big lump out of the pension pot. And if I am really lucky the compounding investment might cover the cost anyway, I should be so lucky.
I think it all depends upon what you want to spend your hard earned money on. You will never win with cars. You are buying an expensive lump of metal that you use extensively and leave outside in the elements. I did PCP finance for just shy of 20 years and worked out I’d lost about £65k with nothing to show for it (obviously that would be far more for the next 20 years) if I had leased it would be a similar story as you are just repeating it every three years. Buying a used car and running it into the ground whilst maintaining it well is a good option. I currently have a used 2017 4wd dsg Škoda which has a pretty heavy service schedule (DSG gear box, haldex, cambelt before they changed the rules) but it still only costs £500 a year. Modern cars, if maintained aren’t failing all the time like they did in the past 🤞. My other car is a 2017 VW up. Paid 9.5k for it three years ago and still worth 6k according to WBAC. cost of ownership this year - £200 quid service and MOT (no advisories) , £20 tax and £97 depreciation so around £115. However I have to drive a 7 year old VW Up to work! I think you just need to choose what your vice is and accept it’s expensive. You can do cars cheaply but do you want to??
👌I think k you make a great point, many don’t consider the £10k servicing cost over 20 years, or the depreciation, MOTs or the repairs etc - they simply look at “I paid £40k for this car new 20 years ago and it still works”. Each to their own as you say.
Thanks Jim, really helpful information. I'm looking for a car in the new year, but getting a lease with a need for 20k miles a year automatically removes the cars that suit my needs. Looking at my current mileage this year, and averaging it out into monthly miles x12 gives me 19500, so before anyone in the comments tells me I probably don't need a 20k allowance, I know that I do.
Yeah, leasing often makes less sense on larger mileages but you might still find something reasonable at 20k if you bide your time - shop for the deal, not the car
@DefinitelyNotAGuru thanks for the reply. Unfortunately, the car has to be large enough for work related duties, plus family stuff. A Mazda 2 or Corsa etc are not going to do the job. I'll probably end up keeping my current diesel car on the road for a bit longer.
always search with your budget, you’ll be surprised by what comes up from time to time. I’ve seen an Audi A6 for less than an A3 in the past! That’s what I mean by shop the deal means. “What’s the best car I can get for £350pm” often works better than “what’s the best price I can get an Audi Q5 40 TFSI Sline in black for”. 👍
Good video thank you very much Just one thing if you keep the car for longer even if it’s 3 years longer (so 6 in total) the cost of the car is significantly less because you adding 3 years where you don’t pay any finance and 6 years old car is not that old.
But you’re likely paying a lot in repairs, tax (which will only ever go up) and more costly servicing (timing belts/chains etc), not to mention warranty etc.
I think you were very generous with the maintenance on the 3 year old car. At least one set of tyres would be needed given you start at 3 years, 18k miles its probably on original tyres. . So £500 maybe on top of what you put down. .
I realise that no one has a crystal ball, but how will car availability be affected when ev to ice percentages increase. Will dealers stop pre registering cars, stop discounts, and even sell to the highest bidder? Will leasing become as expensive as pcp and hp or will it remain behind the curve? Will depreciation dissappear or at least greatly reduce? Just things to consider before buying a petrol car to keep for the rest of my driving years.
Very useful video as always! You have nearly converted me! The only thing that puts me off leasing is repair costs (small dents and scratches), and arguing with the leasing company in case they do not rate the repair work as adequate. Any advice on that? Thanks!
It’s very different to in the bad old days. I did a video on the return of our VW Touran a while back, they charged me £250 for what would have cost me over £600 locally. My mate just returned his Cupra Leon after 2 years with a £60 for a kerbed diamond cut alloy that he was quoted £120 for locally. Keep your car is reasonable shape and it’s nowt to worry about.
I don’t actually lease atm but I have leased twice and both times car has gone back with visible damage on wheel arches /scratches on alloys etc and I haven’t been charged a dime so I wouldn’t worry about repairs- as after reading the t’s and c’s charges would be lower than it’d cost for you to repair privately anyways
My problem is that I walk to work and walk to my local tesco so hardly need to drive anywhere. Any option for me would be expensive for the amount of miles I do
I agree with your figures. However you do need to know your yearly mileage for either PCP or lease so you don't pay too much, or not enough. Also how secure you are over the term of the agreement. Both very important if the car is used for business mileage if you receive a car allowance. In such a situation the mileage could swing, and you might change your job, and you are still committed to the agreement. Personally in that situation pre covid a low interest bank loan made sense for flexibility. However today, interest rates are higher and car purchase costs are higher, making it not as viable/higher cost overall compared to lease. So if you want the flexibility, so avoiding pcp/lease, you are stuffed!!
Have you seen the lease prices lately?? If you’re considering a new car it simply cannot be overlooked. Lack of flexibility versus paying £££ over the odds is perhaps a small price to (not) pay. Don’t forget you can exit (for a price) if push came to shove.
Whatever suits you; there’s not really a sweet spot - unless there’s a good saving for putting down a big lump print then it’s probably better to leave it in the bank where it could be earning for you.
And depreciates fairly heavily from new too so some bargains around on the face of it. I’d still take the certainty of a lease over the till of the dice of a nearly new used car. The warranty is not as full as many assume and servicing costs will have some heavy years.
I feel very fortunate to have got a BYD Dolphin & Tesla M3 on 0% PCP deals with no/small deposit earlier this year - better than i could get on a lease. The equity from previous cars is in the bank earning good interest. If id got the Tesla a coupme of months later then a lease would have been a better deal.
✅ 𝐀𝐋𝐀 𝐈𝐧𝐬𝐮𝐫𝐚𝐧𝐜𝐞 : tinyurl.com/j4kv696w (𝙐𝙨𝙚 𝙘𝙤𝙙𝙚 JIM10)
✅ 𝗟𝗲𝗮𝘀𝗲𝗟𝗼𝗰𝗼 : leaselo.co/notaguru-car-leasing
As expected Jim, a clear and easy to follow spreadsheet of how to compare all types of car deals. Trouble is people fall for the the headline cost figure spouted by salesman and dealers alike. My last four cars have all been leased and I followed a similar principled approach to this and leasing always came out on top. If you follow the above approach and do the math chances are you will get the best deal. Well done Jim 👍
Always wise to do the maths and not simply fall into the trap of doing what you've always done isn't it?! 👍👍
Thanks for showing us how to work out the best for our own situations
Cheers Dave - all I want from these videos is for more people to dig a little rather than blindly doing what they've always done just because they've always done it
Very interesting. I normally buy cars cash because of the flexibility it gives me to change whenever I want, but I end up keeping most for 4 to 5 years! I did buy a GR Yaris on finance (£299 per month, bargain!), but as that was a desirable car it hardly cost me anything over the 2 years I had it. With interest rates rising, the opportunity cost would make me reconsider cash. It would be interesting to see these figures for a "high-end" brand like Porsche. Thanks.
👍
Fascinating Jim, as always a big thank you.
Many thanks!
Great explaining loved your last remark… nuf said. Thank you Jim
Glad you enjoyed it
Jim, I’ve been an advocate for leasing brand new cars for years…. People have always commented on my affordability of a new car over a 2nd hand…. Last year, I made the biggest mistake in my life and was forced to buy a used car. In that period I have spent more money on fixing the car and petrol over a new car! I won’t be making that mistake again… I understand car enthusiasts or people who are ( or who knows ) a mechanic. For everyone else, it’s a massive gamble. I much prefer to know where I stand with my money each month and leasing (with the maintenance option) is the wisest option.
Thanks for vid’s….
I have been in the same position myself; even if I had the time and skills I don’t need another hobby. Thanks for watching 👍👍
Great video Jim, more of these please.👍🏻
Thanks Bro 👊
Hello Jim.That was very informative.m
Glad it was helpful!
I normally buy new cars and keep them for 15 years, I bought a brand new December 22 reg Seat Leon Estate ES Dynamic 1.5 for £21, 000. I do my own services and rust treatment, few £ for the ACF50 and £55 for the OEM oil and Filter. I clean the car weekly including the brakes and calipers. I was lucky I ordered the car prior covid on a fix price basis and ended up saving £6000 on a similar car on the day I received it a year later.
👌👍
I buy cash as monthly payments affect the ability to save fast for other investments or a new car in say 5-7 years time.
I was always told the monthly payments are the biggest wealth killer. You want as little of them as possible.
Opportunity costs are always a bit of a guess. The chances are if you're buying cash you're probably going to wipe that difference out very quickly with the ability to save at a faster rate. Everyone is different.
In the meantime you’re losing 5% per year on your cash (at the moment). People who don’t understand finance and make bad choices could easily have it suck their wealth; those who do understand it and how take advantage of it in the right way can do very well.
Each to their own.
@DefinitelyNotAGuru well I'm not mad enough to buy a car a deplete all my savings 😉
@@MCJC96 Warren Buffet will be happy; have a look at his thoughts on leasing
It’s through watching your videos I am definitely going to lease my next car.
I hope you find a great deal 👍
I watched your videos last year and now lease my ŠKODA Octavia. Thank you
Hope the videos helped 👍
@@DefinitelyNotAGuruvery much so.
Buying in cash a used 3 year old well looked after quality car and keeping it for 6 years ( ie 2 PCP cycles ) is the best financial decision you can do as private buyer. you save 50% off MSRP ( if not more), you save on finance charges, you have no monthly payments to worry. Leasing cars in perpetuity is not really clever unless you do not plan to own a car again after the end of the lease.
Often not the case, especially once you’ve factored in increased servicing costs and a worthwhile warranty or potential repairs.
@@DefinitelyNotAGuru unless it's a 3 year old Toyota with 7 years warranty remaining on it :p
I did the maths too and for me it was lease if you want new and no hassle but buy used approved and hold for 8 years at least to maximise value. Oh, and get a Toyota.
@@thegoodraj agreed, a Toyota is solid as second hand buy. They last long often with minimal problems. It’s scary though how much money you lose on a new car…on the Skoda superb example, the car lost nearly 8k just for being pre registered with 10miles…
Guess it depends if you want to have something to show st the end or not.do you rent a house or buy it same things really
@@staceyismine great point but quite the opposite, a house appreciates in value and a car depreciates. As Warren Buffett says “buy appreciating assets, rent depreciating assets” he’s worth about $145Bn.
Jim really good……. Many thanks
Many thanks Chris!
Hi Jim love watching your videos, I’m thinking of leasing my first car, so totally new to this please can I ask when I make the first down payment for lease do I only pay the down payment figure to start or I should be expecting to pay the down payment plus the documentation fee as well ? Thank you
Very informative video Jim, its all down to mind set at teh end of the day. I'm near retirement and looking for a new car to hopefully have some worry free motoring and now after 50 years of always wanting to own the car a lease would mean I don't need to take a big lump out of the pension pot. And if I am really lucky the compounding investment might cover the cost anyway, I should be so lucky.
Right on! 👍
I think it all depends upon what you want to spend your hard earned money on. You will never win with cars. You are buying an expensive lump of metal that you use extensively and leave outside in the elements.
I did PCP finance for just shy of 20 years and worked out I’d lost about £65k with nothing to show for it (obviously that would be far more for the next 20 years) if I had leased it would be a similar story as you are just repeating it every three years. Buying a used car and running it into the ground whilst maintaining it well is a good option. I currently have a used 2017 4wd dsg Škoda which has a pretty heavy service schedule (DSG gear box, haldex, cambelt before they changed the rules) but it still only costs £500 a year. Modern cars, if maintained aren’t failing all the time like they did in the past 🤞.
My other car is a 2017 VW up. Paid 9.5k for it three years ago and still worth 6k according to WBAC. cost of ownership this year - £200 quid service and MOT (no advisories) , £20 tax and £97 depreciation so around £115. However I have to drive a 7 year old VW Up to work! I think you just need to choose what your vice is and accept it’s expensive. You can do cars cheaply but do you want to??
👌I think k you make a great point, many don’t consider the £10k servicing cost over 20 years, or the depreciation, MOTs or the repairs etc - they simply look at “I paid £40k for this car new 20 years ago and it still works”. Each to their own as you say.
Thank you, that was very informative, have a great Christmas 🎄🍷
Same to you! 🙏🎄
That’s why we lease though motability you pay the one price and the only thing you have to pay is the fuel
👍👍👍
Thanks Jim, really helpful information. I'm looking for a car in the new year, but getting a lease with a need for 20k miles a year automatically removes the cars that suit my needs. Looking at my current mileage this year, and averaging it out into monthly miles x12 gives me 19500, so before anyone in the comments tells me I probably don't need a 20k allowance, I know that I do.
Yeah, leasing often makes less sense on larger mileages but you might still find something reasonable at 20k if you bide your time - shop for the deal, not the car
@DefinitelyNotAGuru thanks for the reply. Unfortunately, the car has to be large enough for work related duties, plus family stuff. A Mazda 2 or Corsa etc are not going to do the job. I'll probably end up keeping my current diesel car on the road for a bit longer.
@@DaveJohnson How big do you need, there is Octavias on leaseloco at decent prices with 20000 miles a year.
always search with your budget, you’ll be surprised by what comes up from time to time. I’ve seen an Audi A6 for less than an A3 in the past! That’s what I mean by shop the deal means. “What’s the best car I can get for £350pm” often works better than “what’s the best price I can get an Audi Q5 40 TFSI Sline in black for”. 👍
@@Willowfifteen Octavia is one of the cars I'm looking for, so I'll take another look at LL. Cheers 👍
👍👍👍. Thank you Jim
Very welcome
Not disagreeing with you Jim your doing a great job👍🥳🥰
👌
Good video thank you very much
Just one thing if you keep the car for longer even if it’s 3 years longer (so 6 in total) the cost of the car is significantly less because you adding 3 years where you don’t pay any finance and 6 years old car is not that old.
But you’re likely paying a lot in repairs, tax (which will only ever go up) and more costly servicing (timing belts/chains etc), not to mention warranty etc.
I think you were very generous with the maintenance on the 3 year old car. At least one set of tyres would be needed given you start at 3 years, 18k miles its probably on original tyres. . So £500 maybe on top of what you put down. .
If I’m not overly generous here and there people think I’m delivering loading the deck in favour of leasing.
I realise that no one has a crystal ball, but how will car availability be affected when ev to ice percentages increase. Will dealers stop pre registering cars, stop discounts, and even sell to the highest bidder?
Will leasing become as expensive as pcp and hp or will it remain behind the curve?
Will depreciation dissappear or at least greatly reduce?
Just things to consider before buying a petrol car to keep for the rest of my driving years.
No idea
Very useful video as always!
You have nearly converted me! The only thing that puts me off leasing is repair costs (small dents and scratches), and arguing with the leasing company in case they do not rate the repair work as adequate.
Any advice on that? Thanks!
It’s very different to in the bad old days. I did a video on the return of our VW Touran a while back, they charged me £250 for what would have cost me over £600 locally. My mate just returned his Cupra Leon after 2 years with a £60 for a kerbed diamond cut alloy that he was quoted £120 for locally.
Keep your car is reasonable shape and it’s nowt to worry about.
@@DefinitelyNotAGuru thanks very much! Keep up the great work!
I don’t actually lease atm but I have leased twice and both times car has gone back with visible damage on wheel arches /scratches on alloys etc and I haven’t been charged a dime so I wouldn’t worry about repairs- as after reading the t’s and c’s charges would be lower than it’d cost for you to repair privately anyways
My problem is that I walk to work and walk to my local tesco so hardly need to drive anywhere. Any option for me would be expensive for the amount of miles I do
Maybe I’ll do a video on leasing a pair of trainers…😁👍
I agree with your figures. However you do need to know your yearly mileage for either PCP or lease so you don't pay too much, or not enough. Also how secure you are over the term of the agreement. Both very important if the car is used for business mileage if you receive a car allowance. In such a situation the mileage could swing, and you might change your job, and you are still committed to the agreement. Personally in that situation pre covid a low interest bank loan made sense for flexibility. However today, interest rates are higher and car purchase costs are higher, making it not as viable/higher cost overall compared to lease. So if you want the flexibility, so avoiding pcp/lease, you are stuffed!!
Have you seen the lease prices lately?? If you’re considering a new car it simply cannot be overlooked. Lack of flexibility versus paying £££ over the odds is perhaps a small price to (not) pay. Don’t forget you can exit (for a price) if push came to shove.
What’s the best initial payment to pay? Is there a sweet spot?
Whatever suits you; there’s not really a sweet spot - unless there’s a good saving for putting down a big lump print then it’s probably better to leave it in the bank where it could be earning for you.
Normally 3 rentals in advance is a standard contract👍
My guess, the lesser the better, so perhaps 1+23 or 1 + 35 would be good
@@lifeoftravellingdesi1537it’ll be different in a case by case basis so the sums must be done
Unless you get a used Kia which have 7 year warranty from new
And depreciates fairly heavily from new too so some bargains around on the face of it. I’d still take the certainty of a lease over the till of the dice of a nearly new used car. The warranty is not as full as many assume and servicing costs will have some heavy years.
Hi Jim, Not sure if one gets a car on lease, are they allow to modify the car? Say if I want more oomph from the engine, can I get it remapped?
Not without permission of the lease company (who would say no as it invalidates your warranty).
👍🏽
👍👍👍
I feel very fortunate to have got a BYD Dolphin & Tesla M3 on 0% PCP deals with no/small deposit earlier this year - better than i could get on a lease. The equity from previous cars is in the bank earning good interest. If id got the Tesla a coupme of months later then a lease would have been a better deal.
👌