I had a car once, but I had to sell it because I had to choose between paying my rent or having car insurance, I could only afford one, so I bought a bike, now I get around everywhere with it, its great, although it doesn't have folding rear seats for those trips to ikea.
Long comment, but bear with me here, Some people are saying leasing is bad because it is basically paying for the first couple years of depreciation of a car and not owning it in the end, it is cheaper to just buy a used car. Non-car people should really stop being a cheap and recognize the intrinsic value of changing a new car every two or three years. First off, it reinforces a good image, say if you do business with some wealthy client, they will probably immediately look down on you and doubt your success and capabilities if you show up with a 10 year old Toyota. Secondly, new cars are better equipped with new safety tech and are generally more reliable, and with full factory warranty, you are not likely to have to pay any maintenance costs. Thirdly, for people like me, who would likes cool new cars, driving a new car simply makes me happier. By keeping an old car, one spontaneously foregoes the above. Moreover, leasing a car is likely to be cheaper for many people than financing the car, or even straight up buying it. Primarily, monthly cost for leasing is almost always less than the monthly financing payment, and leasing only asks you to pay for the depreciation amount, not the full car's sticker price. Second off, you get a tax write off as the monthly payment can be claimed as expense easily, if you are in the top tax bracket like me, this effectively cuts off almost 1/3 of that monthly payment. And you pay less vehicle tax, much less. Lastly, this one is mostly against straight up buying a car, money has time value, the more you can delay the payment, the less the payment is relative to you. The risk free rate (the rate at which your investment will grow without nearly any risk at all) now in the us is about 3%, my personal portfolio did about 11% last year. In my case, I’ll make a simple model, let’s say that I used $100 to buy a car in cash 3 years ago, I wouldn’t have any of that $100 right now, but if I leased that car, and I pay $2 a month and have a $10 down payment and put all available money in investment at all time (total payment 2*36+10=82, 82% of the full car's price, way more than in real life, ~65% ish irl), I would actually still have slightly more than $40 at hand after the lease is over if I maintain my annual 11% (0.9% monthly) and balance is calculated monthly, (do remember that interest in real life is calculated daily, and in that I would have even more interest money, but this is a simple model), the car will likely depreciate about 60%~70% in three years. If I bought the car, I will have to sell the car to get that money back, it’s a whole lot of hassle and I’ll probably have to sell it at a lower price to sell it quick, remember money has time value so I need that cash quick. That makes buying the car a loss for me. Some might say, “well I don’t sell the car I don’t see the problem here”, but the car you have worths less than the cash I have, and my cash will only grow in value as I invest, your car on the other hand will depreciate, albeit slowly after 3 years, but depreciates nonetheless. Plus by driving an old car, you lost the intrinsic value of a new car as I mentioned in the beginning.
I lease and pay £156 a month on an Ibiza 1.2T FR it was on a 3 + 23 plan. now the reasons i did it was so my wife had a new, reliable & safe car to drive round in. So that's going to cost me 4k over 2 years, I think that's better than getting an older possible less safe and reliable car or spending more to actually own it
Work your ass off and save. Buy low-km pre-owned cars that are 1-2 years old from reputable dealers, preferably an official dealership with full maintenance history/docs (e.g Mercedes Preowned, BMW Premium Selection, Audi Certified, Porsche Certified). Have enough money to pay outright OR to at least part finance the car - Never fully finance or lease unless you're fully secured in your job long term (which very few people are). Only get the car if it is 50% or less of your annual salary.
Cars that are a year or two old have been thrashed to within an inch of their life by the sales team and customers test driving them! NEVER buy exdemo!
If the dealerships prepared to offer the vehicle with an AUC warranty for 1-2 years without excess charge I say cash in on it since you wont be footing the bill if stuff breaks.
Don't know about Great Britain, but in the Netherlands the lease gets registered as a loan and has a great effect on the amount of money you can further loan. Now you can only get a mortgage minus 4 times the value of the car. The factor 4 is some sort of penalty for having a private lease car. Ultimately it comes down to whether you want to drive a new car or buy a house. I'd know what I'd rather have...
I don’t mind everyone leasing their cars or financing, it means there’s really good used car deals. Eg. Mr and Mrs Smith lease a brand new 430d for 399£ monthly over 3 years + deposit of 4K , that’s almost 6k a year just for a car And 18 k over 3 years. They hand the car back in and I snatch it at auction for 19-18k which I get a loan to cover cost. It’l only have around 30-50k miles at which point il keep it for another 3 years and build mileage to just under 100k (as it’s hard to sell on past that mileage) and sell it for 13k at auction. I’ve just ran a car for 5k over their 18k lol. Il have GAP insurance if it’s written off within my ownership to pay off the loan. Leasing is for people who have property and spare income coming in. Those that lease beyond their means are stupid. Roughly 10% of your earnings should cover the cost of a car any more and my opinion is it’s beyond means. I spend my saved money on property either shared ownership or buy to let and hopefully if I live long enough il retire at 50. I’m only 24 with my 2nd property. Just my 2p worth for those knowledgeable amongst you.
Mahi S Jazakhallah for highlighting this. Next time don’t be so judgmental. Loans don’t immediately mean there will be interest, there’s plenty of 0% interest loans out there especially within the price bracket. You’re just charged a service fee of £50.00 or so a month on top of repayment. Google 0% interest loans.
Abdul Salam 0% interest loans? Don’t exist mate. There are Islamic mortgages that certain banks provide but unless you’re putting in over 40-50% of the property value they won’t finance the rest. I doubt you’re onto your second property with 0% interest mortgage. If that was the case, everyone would do it.
Mahi S I’m taking about 0% interest loans for a car here borrowing 15-20k like that is very possible. Ofcourse there’s no mortgages out there offering 0% interest to my knowledge but I wasn’t talking about that. But you don’t need 40% deposit for a house you need 20% on most halal mortgage providers eg. Al rayan bank ask for 20%. If you do shares ownership it’s even less. I mean no offence but you sound like you don’t know much or you’ve misunderstood me.
Not being able to end the agreement early and still be liable for all outstanding payments is an eye opener! With a recession looming, the advantage of PCP is attractive.
So if I understand correctly, the example shown at the beginning would suggest that after 3 years you would have paid £9000 on a £30k car? What can be bad about that?
Because renting anything is dead money that 9k could have been saved and invested in a home which rises in value and is a nest to you. A car won't make you rich,why waste hard earned money every month you can get some beautiful cars for just 2k
@@abdullahelhashimy7115 But you could have an extra 250 per month but getting a nice looking car for 2k and not having any payments every single month 😂
This only applies for second hand purchases, wait at least 3 years for the depreciation curve to begin leveling off (the longer the better but the first 3 years are the greatest, usually half the cars value), depreciation is typically the most expensive facet of car ownership.
Not all people get a car on lease to show off, like me I’ve wanted an Audi A3 for the longest time and even though it’s not my car, when I look at my driveway it motivates me and pushes me to do more limits
As someone else has asked, is that your new Volvo XC60 that you were going to get as a "Long Term" test, free press car, Mat! You won't need to a Personal Contract Hire! Nice!
The biggest financial loss in cars is due to early depreciation. Its the depreciation amount (around 50-70% of new value) that is being paid back under leasing. This alone indicates that its a more expensive way to buy a car, and then the car is handed back! The dealer gets to sell the car twice, and the early depreciation is paid for under the leasing arrangement. That's why all manufacturers promote leasing so much. Its a win win for them. I would hate to pay £/$ 300 - 400 a month for a car :-)
Paul Lynch Knowledgeable people will know that lease deals are usually calculated over 3 - 4 years hence the % quoted. This is to ensure the lowest monthly cost, which is what many buyers seem to concentrate on. A lease for only 2 years would be more expensive as the costs involved would be spread over the shorter period. BTW I'm actually pretty good at maths!
A skoda octavia vrs price at the show room is 25k. I currently lease that car at a cost of £230 a month and £1380 deposit for 2 years which equates to 6680. Now if you take into consideration VAT on cars which is 20 percent, 5grand of 25000 pound is gone straight out of the showroom when purchasing the car outright...
Everyone values things differently. Some people see a car as merely a box to get them from A to B. But people derive different levels of satisfaction and enjoyment other cars. That translates in to how much someone is willing to pay. If your logic was right - we'd all be driving around in the same 2nd hand cheap Hyundai.
chrisjie buying a second hand car is the cheapest, 2-4 year old car with little mileage is 20-50% cheaper than a new one. Do you really need a brand new one? Heck you can even research on which car was the most reliable before buying, because people had experience with it. If the car has full service history, and do a detailed mechanical check, you won't have problem.
Not everybody wants an old cheap banger. Price isn't just about finding the lowest. Do you also live in a studio flat and buy Aldi own-brand foodstuffs?
Actually for people like me leasing comes out as cheaper than owning a used car. I did my maths and the car I could afford replacing my current one for (if I move back to England in these following months) is a BMW 1 Series (04-06) that costs me atleast £2k, then insurance, being young and living in London another £3k/year.... then we have fuel, being an older car, uses up more... then maintenance, MOT, road tax... and it adds up to a shit ton of money. Leasing a brand new A180 or A200 is £190-£200/month, insurance on that is barely £1k for me.... maintenance included, tax included, no need to worry about MOT’s either... and you drive around in a brand new car. Not to mention, whenever the time comes to sell that 1 Series... you probably will lose another £500 because you put more miles on it, and I know people never like paying what someone asks for a car. So yeah... for some leasing is not the answer, but for young drivers like me, I really don’t see the reason why not to be driving a newer car and not pay as much.
when the lease contract ends and you hand the car back do you have pay another initial payment (9mths) or do you choose a new car with the same lease company and just keep paying the monthly payments for the next 35 months ?
You can buy the car at the end of the agreement. It depends on the dealer, they send them to auction so if you want to buy it they will make even more money in some cases or offer it you for a good deal. VW group mainly allow you to buy the car. Just ask, it's sometimes the dealer companies though such as listers.
I'd never buy a brand new car anyway. Even a 2 year old car cuts out a lot of the depreciation and as long as it's been well kept, it's new to all intents and purposes. Plus, it means you can afford something much better. Hmm, should I get a new VW Up or a two year old Golf? Decisions, decisions...
There a place called Evogo where you don't have to pay a massive deposit. The first payment will be how much ever you pay for the car a month. then when you get the car the contract is only 6 months. So you can get a brand new car every 6 months. Anyways I'm thinking of going for it since I've just passed.
Leasing is my preferred option. I don't care about owning the car 🚙 i just like to have a brand new car 🚙 every 3 years. Additionally i pay extra so the leasing company sorts the car 🚙 out if it breaks down or fails.
Because living within ones means is no longer fashionable lol. Still, this means there's way too many used cars for sale at very cheap prices, so people like me can BUY a good car at a much lower price. :-D
Bit different here in Holland, private leases are all inclusive most of the times so all you'd pay for as the user is petrol. It is also possible to end the contract earlier than the period agreed upon, you sometimes need to pay a fine but its never the full duration of the contract.
You can end the agreement early. Request a settlement figure and normally its around 50% of the outstanding balance. Also you often do get the option to purchase the car at the end of the agreement. But normally this is not cost effective and you can often find the same car (Age and mileage) cheaper at a dealer. But why would you want to buy it when a new one would cost less monthly and you would just suffer more depreciation.
Guess what a lot of ppl didn't realise is buying a car that is over £35k, will lost its value for approximately £10k and above. Also, don't forget if you are good in investing, having £30k cash and invest something will probably earn you back couple of thousands in the following years.
Terence Tai Problem is the people who are savvy like that will never ever buy a car on lease. Maybe a good deal Brand new on hire purchase or something pre registered, or 2-3 year old low mileage cars. Leasing short term is mostly for businesses and plonkers who wanna look gud
Terence Tai most people who cant afford the depreciation loss of a new vehicle will simply purchase a 3+ year old second hand example with a levelled off depreciation curve, if there's people who are that desperate to be sat in a band new car who cant afford the to take the aformentioned hit they've probably got other financial lifestyle issues to address than to be worrying about investments.
The ideal way of leasing is never to compare with old car. If you are happy with a 3 year old car, there is nothing wrong with it. But it is to recommend to people who always want to new car and capable enough to search for good lease deal, manage their finance and use the extra cash flow to do other investments.
I think the "investment" that we are talking here is not about invest in car, most car depreciate, it is extremely hard to buy a normal car that will make you money in the end. The investment that I am talking about here is to use the cash that were suppose to buy a car to invest in something like property or stock which in long run will make you money.
I know of big problems after an accident and the car is badly damaged. The lease company can be very awkward and unhelpful. A worrying, unwanted problem in stressful situation. Much easier if you own the car yourself.
The only think that deters me is the mileage restrictions as I commute far and drive quite, so I think I'll stick to getting used cars but it does seem nice to have a new car every 3 years
In the UK press there is talk about "Sub-Primes Cars" (Bank of England). It adds to your personal debt. If leased you are tied to the dealer so no chance of moving to another after poor customer service. I suppose if you have a Tesla, Zoe, leaf or the likes then a lease plan could be good for you as the batteries should be included (sorry a pun).
-Never buy new. If you want 'new,' buy one with sub 3k miles and save 15-20%. -Never lease. -Don't care about what other people think ie don't buy a Beemer just because you want respect, no-one cares. -Only finance if you're raking it in and the finance interest is lower than your current investments. -Spend money on assets, not depreciating liabilities
Agree most, but only one point, please explain how is an asset not depreciating?Like what? Real Estate? besides? I thought everything you put money with will definitely depreciating day by day, beside profitable investment, ie Stocks?
Assets, in the sense that I'm referring to them, are anything that makes money (theoretically) and (again, theoretically) increase in value. Stocks, bonds, real estate etc are the typical methods but there's a wide spectrum of choice. Simplified example: You buy a 20% share in a profitable local business. You take 20% of the annual profit and also benefit from any increase (hopefully) in the value of the company while you own that stake. If you keep increasing your salary and dumping a lot of it back into assets you'll be singing in 10 years time. Keep spending 50% of your paycheck on a mode of transport and you'll be treading water (or drowning in debt) the rest of your life.
Sure (all this is just my opinion). Leasing is nearly always the most expensive way to own a car, namely because 1. They're only ever new cars (see point one) and you'll pay a huge premium for that. 2. Over the period of 'ownership' you'll generally pay more than you would via any other method. This combines with the obvious part that is you never own the leased car, so you don't keep it. In my view, if you HAVE to lease (or finance) then you can't afford it in the first place. Better to buy a reliable used car for cash, save, invest, and be able to easily purchase a nice car + be financially cushty in 10 years time.
what a lot of crap!! a lot of employers now offer discount lease deals through reputable lease firms - allowing employees to lease cars at a discount and usually on 1+ plans.. all they need to do is pay for insurance and fuel.. the discounted costs over the term of the vechicle are SUBSTANTIALLY lower than if they bought the car outright and took the hit on depreciation!.. a few of the companies also offer to sell to the leaser at end of term (you only have to ask for a settlement figure) - otherwise they usually end up in the dealers AUC.. (ironically where some of the other people say they buy from on here!!)... typical example would be something like a Golf R lease for 1 x £300 and then 23 x £300 (including maintenance) - total cost £7.2k for the lease for 2 years... Golf R is c£32k car - so in 2 years the only way you'd be better off is if the depreciation was less than £7.2k and you hadn't had to pay for any servicing or maintenance!! - a quick check of Auto Trader shows 2 year old Golf R's are going for c£20k (so have depreciating £12k in those 2 years)....
What if you'd like to modify the car? Is it allowed on a lease, finance car? Modifications such as exhaust system, ECU remap, Stage 1,2,3 upgrades etc?
I own a 13 year old car and i recently worked out the difference in cost as to leasing through a work scheme that provides insurance aswell as maintenance the reality of my scenario is that i would be paying an extra 1500 over the three years to have a 17 plate spanker but i still won't go ahead because anything can happen tomorrow let alone three years financially so im just going to play it safe.
I suppose the terms vary a lot, since all leasing I'm familiar with always lets you buy the car afterwards and also always includes "free" maintenance plan. It's basically just car financing with a HUGE final amount (the worth of the whole car after three years). You pay a little bit extra for the worry-free driving.
Maybe we should encourage leasing because with the leased cars flooding the market as used, they are bringing down the price so more of us can afford a nice, late model car that has already depreciated and has probably been cared for quite well. Win win. :)
please change background music as its Free non copyright musical theme used over many Channels. Car Wow is becoming a Brand, must have their own identity.
So much negativity regarding leases here! I'm on my second leased car. I could have a company car but choose to lease as it gives me more choice and actually works out only slightly dearer compared to the BIK tax I would pay if I had a CC. I agree, it may not be a good idea for someone with low or inconsistent income but for anyone with a regular job (doesn't have to be earning mega money) who enjoys new cars, or like me needs something comfortable and reliable to perform their job, a lease is a great idea. In my driving career I have had everything from a £750 14yr old Mitsubish Colt (owned) to a £32k Audi A4 (current car, leased) depending on what I can afford at the time. I would never buy the car I have now because of the depreciation and the fact I don't have £32k going spare! Leasing puts cars that would be out of most people's financial reach well within and why shouldn't we be able to enjoy whatever we want with our own hard earned cash?
Paying for a car in the first 3 years is THE most expensive period to own a car, leasing is just paying depreciation. A new BMW 3 series msport 320D with say 14k mileage allowance a year costs around 500 per month plus a deposit so overall around 20k for 3 years ownership. You'll find yourself a 3 year old car with 30k miles on it for 20k or less, a 5 year old with 40K miles for 12k. It's then your car for the next 5 or 6 years and a 9 year old 3 series will still make 5 to 7k! Put the money away in a pot like I do and upgrade every 3 to 4 years. Leasing is just another way for people to buy what they can't be bothered to save up for!
@James Macey with the rise in popularity of PCP a pre-purchase inspection when not going through an AUC system is more crucial than ever, given the PCP owners don't actually own the car and most are only keeping it for 3 years, just like with company cars of old many will be treated with poor mechanical sympathy and thrashed.
Mike Shipton my dads a mechanic and we always buy direct from the owner never from a dealer, I.e. I'll buy from a 50 year old guy and not from a dealer because the car could have been thrashed but some 20 year old. But as you say lots of 3 to 5 year old cars have just come out of lease and could be owned by anyone. It's rumoured that the leasing bubble could burst as they just aren't making the money in the auction second hand that they expected to at the start of the lease, so the monthly rentals will have to increase in the future
Your opening statement about paying all the depreciation and handing the car back being the most expensive way to own a car is completely inaccurate. Firstly you don’t pay anywhere near the depreciation of the vehicle (don’t forget to add 5-6-7k in VAT which is not part of the asset value) and secondly if you did buy it outright you’d take he hit on the full depreciation and say your example was right, in your scenario you’d be left with a depreciating asset which continues to lose money instead of handing it back. There is a reason rich people lease vehicles and stay rich, they have financial managers who prevent them from buying depreciating assets.
Also you don’t own the vehicle at the end of a lease, you hand it back and get another lease in a new car. You seem to have finance and lease mixed up.
So whats the difference between PCP and PCH? Is there any difference in the monthly price or only the two things stated in the video (being able to end early and purchasing the car)
Can't buy the car at the end!? In America, all dealerships present the the residual price of the vehicle on the purchase agreement and you can buy out your lease at the end of your term
Leasing is for you if you want to replace your cars every 2-3 years, finance or cash is better if you intend to keep the car for 5 years or longer. Personally I would never lease because it would always feel like the car is not mine, plus the limits on mileage and damage make it too constricting. Totally understand why some people lease though, if you can afford it and you always want a newish car then why not.
KingSadim I have heard it's actually really good. Just stay with the dealers though, make sure you get your correct mileage and even if you go over 1000's of miles you know how much it costs and it's usually under 8p per mile so it's not expensive. Even curbed wheel only cost like £50 each. Pretty good if you ask me compared to if you had your own car. I guess it's only good for people who want a new car but it's still around the same cost as buying it and selling it after two years but it comes with less hassle. Not really about not being able to afford the car really
Chatta290 Finance on a new car will evntually reach the point where you are in positive equity, that is where you have real piece of mind because you won't be in debt if you suddenly lost your earning power. That is why I said finance is for people who intend to keep the car for at least 5 years, if you always want the new versions of a model you like then lease is the better option, but it is a costly option as it is a constant monthly cost akin to mortgage levels if we are talking about cars in the 40k bracket.
Buying or leasing is always a gamble .you really have to go through these lease agreements with a fine tooth combe.the garages win every time .they love it when a young person walks in and gets their new fiesta or fiat 500 on pcp and the commission gets the better of the sales men. Try buying a car with cash and there not interested. The garages obviously see more profit leasing these cars out. Cash is king buy a car you can afford and you wont have any problems
Do you have to pay the initial payment every time you lease a car, or you do you keep paying the initial payment when the time comes to change the car.
I always thought there was bank loans, dealer provided loans,. PCP and in some cases PHP, and as I have done true Leasing from a leading company. Bar very special and rare PCP deals, Leasing is invariably cheaper than PCP as long as you want to stay with a new vehicle and not pay the end of PCP balloon payment?
That was the lousiest information ever. You escaped from all the hard questions such as who decides what's normal wear on the car and what's more economic of buying or leasing. Absolute crap
The UK car market is crazy! Insurance is ridiculous, used car market is wierd, regulations are stupid, model spec names like "SE" are still a thing, etc. Why didn't all this die off in the 90's like in the rest of Europe? And don't blame the limited market, hardly any cars sold in Sweden are exported elsewere, despite correct-hand steering!
The best way is not ever to lease, buy or purchase/hire a brand new car. 90% of current 3 year old cars are pretty reliable but even if they are not you can take out cheap cover against this. Leasing a new car is suicidal - you pay a huge amount and own nothing after 3 years. Best combination is to PCP a 3 year old car. You are not taking the deprecation hit - someone leasing it before you paid for all of that. So you have a perfectly good 3 year old car which will cost you less per month than leasing and you own the car after the term if you wish, or you can hand it back as though you had leased it, but for a fraction of the price of leasing a new car.
That £1800 then £200 isn't going to get you, most folks dream car. The thing is most cars are great, not for 3 years, but for 6 years or more. Cars are only cheap to buy at 1 year old if they aren't that desirable. Try getting A Golf GTI with 8K on its clock at a year old or any such car. You'll pay nearly new (discounted) prices. I reckon you either buy at a few years old or buy new, look for a good deal, then keep it for 6 years. If it's German, it will still look current (ish) when you flog it.
The best way to have the car of your dreams: dream about your own, current car!!! :D There are a lot of things that are more important than having a car of your dreams... especially if you have a family! Secondly, if money is not an issue, then you can have any car you'd like... and not needing to lease it. ;o)
I'm just gonna keep using old cars which are way more fun to drive. If you don't have a good chunk of the money, never finance. You never know what happens, you could need the money which is impossible to retrieve with a lease for example.
lease is the way to go. If you buy bmw, merc audi they depreciated at a rapid rate. You will find most luxury car buyers lease because if you bought outright your $80,000 car would be more like $17,000 in a dew years
Brook they do it because most cannot afford it but want a luxury brand. Or they are businesses or taxi companies so leasing will help cash flow. Plus, you want these unreliable cars to be in warranty when you own them anyway.
@Brook you do realise that PCP rate you pay for these cars is pretty much covering the depreciation right? Sure you can make the argument that PCP may save you 10-20% of the true depreciation vs paying with cash but the car's still loosing 50% of it's value in the first 3 years either way. Unless your goal is to be sat in a new vehicle no matter what the cost, from an economic standpoint it makes far more sense to allow the depreciation curve to level off (typically 3+ years) and purchase second-hand, when you come to sell the vehicle the depreciation loss over the term of ownership will be magnitudes lower than what you spent over 3 years on the PCP contract.
yes, its a good tax right off for business owners. The point is the everyday jack would not buy a luxury brand is because the car depreciates rapidly more so than most brands. If jack was wealthy he might, as some people just have lots of expendable income. In Australia you pay a luxury car tax of 33%, so when you buy a car and want to trade it you are 33% poorer straight away. Unfortunately unlike Europe where "luxury" brands are not that expensive we pay through the nose making leasing the best option.
T Tan completely incorrect. Rich people don’t buy depreciating assets outright they lease them and hand them back with minimal losses. That’s why they are rich, money smart. Put it the this way, Jay z and Beyonce have a net worth of $1.4bn, they just bought a house for $88m they put down $33m and mortgaged the rest...when they could clearly buy it outright. However they $50m they didn’t use in liquid cash is invested and earns MORE than their monthly mortgage therefore the house is buying itself. Money smart. Things are not always as simple as you believe. I guarantee all their cars are leased too.
I am all for leasing now almost at the end of a pcp and basically going to at best be about £200 in equality at the end I could have leased a better car for the same amount of money so why bother with a pcp.
Leasing makes complete sense. Why have a large sum of money trapped in a depreciating asset? If I have £20k in a car, 3 years go by and it’ll be worth at least 25% less. If I put that £20k into an appreciating asset, i.e. stocks/shares/property, after 3 years, if the investment is a wise and well considered one. Potentially appreciation could be 10-30%...
And how many of the commenters have cars on pcp thinking they own them. Deposit, monthly payments and then a balloon payment at the end. This channel reviews new cars , and you have to be out of your mind to go and pay out right or hp for a new or nearly new car . There’s only one way car prices go. Yeah sure save up £15k and get a car then in 3 years what’s it worth... swings and roundabouts. Prefer my cash in the bank and monthly payments for a lease. People that lease DONT want to own the car , that’s whole point.
Please, never stop doing videos like this and your reviews! It's really informative and the production is of the charts. Thank you for what you do!
I had a car once, but I had to sell it because I had to choose between paying my rent or having car insurance, I could only afford one, so I bought a bike, now I get around everywhere with it, its great, although it doesn't have folding rear seats for those trips to ikea.
Long comment, but bear with me here,
Some people are saying leasing is bad because it is basically paying for the first couple years of depreciation of a car and not owning it in the end, it is cheaper to just buy a used car.
Non-car people should really stop being a cheap and recognize the intrinsic value of changing a new car every two or three years.
First off, it reinforces a good image, say if you do business with some wealthy client, they will probably immediately look down on you and doubt your success and capabilities if you show up with a 10 year old Toyota.
Secondly, new cars are better equipped with new safety tech and are generally more reliable, and with full factory warranty, you are not likely to have to pay any maintenance costs.
Thirdly, for people like me, who would likes cool new cars, driving a new car simply makes me happier.
By keeping an old car, one spontaneously foregoes the above.
Moreover, leasing a car is likely to be cheaper for many people than financing the car, or even straight up buying it.
Primarily, monthly cost for leasing is almost always less than the monthly financing payment, and leasing only asks you to pay for the depreciation amount, not the full car's sticker price.
Second off, you get a tax write off as the monthly payment can be claimed as expense easily, if you are in the top tax bracket like me, this effectively cuts off almost 1/3 of that monthly payment. And you pay less vehicle tax, much less.
Lastly, this one is mostly against straight up buying a car, money has time value, the more you can delay the payment, the less the payment is relative to you. The risk free rate (the rate at which your investment will grow without nearly any risk at all) now in the us is about 3%, my personal portfolio did about 11% last year.
In my case, I’ll make a simple model, let’s say that I used $100 to buy a car in cash 3 years ago, I wouldn’t have any of that $100 right now, but if I leased that car, and I pay $2 a month and have a $10 down payment and put all available money in investment at all time (total payment 2*36+10=82, 82% of the full car's price, way more than in real life, ~65% ish irl), I would actually still have slightly more than $40 at hand after the lease is over if I maintain my annual 11% (0.9% monthly) and balance is calculated monthly, (do remember that interest in real life is calculated daily, and in that I would have even more interest money, but this is a simple model), the car will likely depreciate about 60%~70% in three years. If I bought the car, I will have to sell the car to get that money back, it’s a whole lot of hassle and I’ll probably have to sell it at a lower price to sell it quick, remember money has time value so I need that cash quick. That makes buying the car a loss for me.
Some might say, “well I don’t sell the car I don’t see the problem here”, but the car you have worths less than the cash I have, and my cash will only grow in value as I invest, your car on the other hand will depreciate, albeit slowly after 3 years, but depreciates nonetheless. Plus by driving an old car, you lost the intrinsic value of a new car as I mentioned in the beginning.
Explained well!!
Lol how to think like your average broke American
Lease and pay £200 every single month to impress a person at a stop light you will never meet
I lease and pay £156 a month on an Ibiza 1.2T FR it was on a 3 + 23 plan. now the reasons i did it was so my wife had a new, reliable & safe car to drive round in. So that's going to cost me 4k over 2 years, I think that's better than getting an older possible less safe and reliable car or spending more to actually own it
Agreed if I could go back would have leased my Ibiza currently on a pcp and pay more then that and basically no money left over at the end.
I was just thinking "I wish I could learn more about leasing" and this video came up on suggested videos. And very useful it was, too.
When i was in India i was watching you and now i am in UK and still watching you.. Lovely person..
Work your ass off and save. Buy low-km pre-owned cars that are 1-2 years old from reputable dealers, preferably an official dealership with full maintenance history/docs (e.g Mercedes Preowned, BMW Premium Selection, Audi Certified, Porsche Certified). Have enough money to pay outright OR to at least part finance the car - Never fully finance or lease unless you're fully secured in your job long term (which very few people are). Only get the car if it is 50% or less of your annual salary.
Cars that are a year or two old have been thrashed to within an inch of their life by the sales team and customers test driving them! NEVER buy exdemo!
Bought such cars 4 times now - every time everything was ok
If the dealerships prepared to offer the vehicle with an AUC warranty for 1-2 years without excess charge I say cash in on it since you wont be footing the bill if stuff breaks.
Nice Richie~ :)
or dont rely on one income stream, if you honestly go through life on a 9-5 job you could lose at any point then you shouldnt even be on this vid.
Don't know about Great Britain, but in the Netherlands the lease gets registered as a loan and has a great effect on the amount of money you can further loan. Now you can only get a mortgage minus 4 times the value of the car. The factor 4 is some sort of penalty for having a private lease car. Ultimately it comes down to whether you want to drive a new car or buy a house. I'd know what I'd rather have...
Lt. KaLi both is what I would rather have.
Love these informative and educational videos! They really do help me!
"Trust me...Never buy a depreciating asset. If it drives, flies, floats or f*cks - lease it!"
Atomicknight My thoughts exactly, straight outta Ballers 😁
Markus Sjoberg 😉👍
It's pretty much the same amount of money if you bought the car and sold it after 3 years. What's the difference?
stretch90 Its not 100% guaranteed that you will sell it
Poor advice
I don’t mind everyone leasing their cars or financing, it means there’s really good used car deals. Eg. Mr and Mrs Smith lease a brand new 430d for 399£ monthly over 3 years + deposit of 4K , that’s almost 6k a year just for a car And 18 k over 3 years. They hand the car back in and I snatch it at auction for 19-18k which I get a loan to cover cost. It’l only have around 30-50k miles at which point il keep it for another 3 years and build mileage to just under 100k (as it’s hard to sell on past that mileage) and sell it for 13k at auction.
I’ve just ran a car for 5k over their 18k lol. Il have GAP insurance if it’s written off within my ownership to pay off the loan.
Leasing is for people who have property and spare income coming in. Those that lease beyond their means are stupid. Roughly 10% of your earnings should cover the cost of a car any more and my opinion is it’s beyond means. I spend my saved money on property either shared ownership or buy to let and hopefully if I live long enough il retire at 50. I’m only 24 with my 2nd property. Just my 2p worth for those knowledgeable amongst you.
Abdul Salam haraam. You shouldn’t get a loan with interest to make a profit. Bad Muslim
Mahi S
Jazakhallah for highlighting this. Next time don’t be so judgmental. Loans don’t immediately mean there will be interest, there’s plenty of 0% interest loans out there especially within the price bracket. You’re just charged a service fee of £50.00 or so a month on top of repayment. Google 0% interest loans.
Abdul Salam 0% interest loans? Don’t exist mate. There are Islamic mortgages that certain banks provide but unless you’re putting in over 40-50% of the property value they won’t finance the rest. I doubt you’re onto your second property with 0% interest mortgage. If that was the case, everyone would do it.
Mahi S I’m taking about 0% interest loans for a car here borrowing 15-20k like that is very possible. Ofcourse there’s no mortgages out there offering 0% interest to my knowledge but I wasn’t talking about that. But you don’t need 40% deposit for a house you need 20% on most halal mortgage providers eg. Al rayan bank ask for 20%. If you do shares ownership it’s even less. I mean no offence but you sound like you don’t know much or you’ve misunderstood me.
But, but ... my dream car is a 30+ year old Toyota Corolla AE86 Trueno.
all you need is 15K and you can buy one imported from Japan
yeah, but most of them at 15k are pretty scuffed, its hard to find one in good shape.
in the UK there is loads of good clean imports though, 15k upto 30
Not being able to end the agreement early and still be liable for all outstanding payments is an eye opener! With a recession looming, the advantage of PCP is attractive.
So if I understand correctly, the example shown at the beginning would suggest that after 3 years you would have paid £9000 on a £30k car? What can be bad about that?
But you don't own the car. So you rented a car for 3k a year.... Seems like a lot
Audi I’d be happy with that.
@@ninjakid09
renting a brand new car for 250 per month is sooooooo cheap
Because renting anything is dead money that 9k could have been saved and invested in a home which rises in value and is a nest to you.
A car won't make you rich,why waste hard earned money every month you can get some beautiful cars for just 2k
@@abdullahelhashimy7115 But you could have an extra 250 per month but getting a nice looking car for 2k and not having any payments every single month 😂
This only applies for second hand purchases, wait at least 3 years for the depreciation curve to begin leveling off (the longer the better but the first 3 years are the greatest, usually half the cars value), depreciation is typically the most expensive facet of car ownership.
Not all people get a car on lease to show off, like me I’ve wanted an Audi A3 for the longest time and even though it’s not my car, when I look at my driveway it motivates me and pushes me to do more limits
As someone else has asked, is that your new Volvo XC60 that you were going to get as a "Long Term" test, free press car, Mat! You won't need to a Personal Contract Hire! Nice!
The biggest financial loss in cars is due to early depreciation. Its the depreciation amount (around 50-70% of new value) that is being paid back under leasing. This alone indicates that its a more expensive way to buy a car, and then the car is handed back! The dealer gets to sell the car twice, and the early depreciation is paid for under the leasing arrangement. That's why all manufacturers promote leasing so much. Its a win win for them. I would hate to pay £/$ 300 - 400 a month for a car :-)
you're not very good at maths are you??... show me a lease deal where you are paying 70% of the cars value in 2 years?
Paul Lynch Knowledgeable people will know that lease deals are usually calculated over 3 - 4 years hence the % quoted. This is to ensure the lowest monthly cost, which is what many buyers seem to concentrate on. A lease for only 2 years would be more expensive as the costs involved would be spread over the shorter period. BTW I'm actually pretty good at maths!
you're good at maths and knowledgeable.... yet can't show me an example to back up your 'theory'... *drops mic*
A skoda octavia vrs price at the show room is 25k. I currently lease that car at a cost of £230 a month and £1380 deposit for 2 years which equates to 6680. Now if you take into consideration VAT on cars which is 20 percent, 5grand of 25000 pound is gone straight out of the showroom when purchasing the car outright...
Very interesting. Lovely car the vrs. Quite stunning.
I love leasing. All I pay for is fuel and insurance. I have an Ateca Xcellence on a 6 x 24 10k. I pay 257pm with 1400 down and that works fine for me.
Great info. One question. Are you able to use your own private registration during the owning period?
Yes most leasing companies let you do this but you need to talk to them first
Love to see a review on that green vrs
Best way is to buy a used car. Just check it thoroughly,and you'll be fine with a good inexpensive car.
jack ripper exactly.
Everyone values things differently. Some people see a car as merely a box to get them from A to B. But people derive different levels of satisfaction and enjoyment other cars. That translates in to how much someone is willing to pay. If your logic was right - we'd all be driving around in the same 2nd hand cheap Hyundai.
chrisjie buying a second hand car is the cheapest, 2-4 year old car with little mileage is 20-50% cheaper than a new one. Do you really need a brand new one? Heck you can even research on which car was the most reliable before buying, because people had experience with it. If the car has full service history, and do a detailed mechanical check, you won't have problem.
Not everybody wants an old cheap banger.
Price isn't just about finding the lowest. Do you also live in a studio flat and buy Aldi own-brand foodstuffs?
Actually for people like me leasing comes out as cheaper than owning a used car.
I did my maths and the car I could afford replacing my current one for (if I move back to England in these following months) is a BMW 1 Series (04-06) that costs me atleast £2k, then insurance, being young and living in London another £3k/year.... then we have fuel, being an older car, uses up more... then maintenance, MOT, road tax... and it adds up to a shit ton of money.
Leasing a brand new A180 or A200 is £190-£200/month, insurance on that is barely £1k for me.... maintenance included, tax included, no need to worry about MOT’s either... and you drive around in a brand new car.
Not to mention, whenever the time comes to sell that 1 Series... you probably will lose another £500 because you put more miles on it, and I know people never like paying what someone asks for a car.
So yeah... for some leasing is not the answer, but for young drivers like me, I really don’t see the reason why not to be driving a newer car and not pay as much.
Maybe not in the UK but in the USA you can absolutely buy the lease car after and you can turn the car in early... For a fee of course.
leasing sounds good, but i want to own my dream car for at least two decades
when the lease contract ends and you hand the car back do you have pay another initial payment (9mths) or do you choose a new car with the same lease company and just keep paying the monthly payments for the next 35 months ?
It would be a new lease so yes you’d have to pay the 9+35
Depending on the country, you CAN buy the car you have been leasing after the term of lease ends.
You can buy the car at the end of the agreement. It depends on the dealer, they send them to auction so if you want to buy it they will make even more money in some cases or offer it you for a good deal. VW group mainly allow you to buy the car. Just ask, it's sometimes the dealer companies though such as listers.
In Germany you can buy the car after the leasing ends.But you have to bargain for the price just before the period of leasing expires..
I'd never buy a brand new car anyway. Even a 2 year old car cuts out a lot of the depreciation and as long as it's been well kept, it's new to all intents and purposes. Plus, it means you can afford something much better. Hmm, should I get a new VW Up or a two year old Golf? Decisions, decisions...
There a place called Evogo where you don't have to pay a massive deposit. The first payment will be how much ever you pay for the car a month. then when you get the car the contract is only 6 months. So you can get a brand new car every 6 months. Anyways I'm thinking of going for it since I've just passed.
Probably worth doing a seperate video on the difference with PCH and PCP, the option to buy the car for example.
Leasing is my preferred option. I don't care about owning the car 🚙 i just like to have a brand new car 🚙 every 3 years. Additionally i pay extra so the leasing company sorts the car 🚙 out if it breaks down or fails.
Because living within ones means is no longer fashionable lol. Still, this means there's way too many used cars for sale at very cheap prices, so people like me can BUY a good car at a much lower price. :-D
Bit different here in Holland, private leases are all inclusive most of the times so all you'd pay for as the user is petrol. It is also possible to end the contract earlier than the period agreed upon, you sometimes need to pay a fine but its never the full duration of the contract.
You can end the agreement early. Request a settlement figure and normally its around 50% of the outstanding balance. Also you often do get the option to purchase the car at the end of the agreement. But normally this is not cost effective and you can often find the same car (Age and mileage) cheaper at a dealer. But why would you want to buy it when a new one would cost less monthly and you would just suffer more depreciation.
Guess what a lot of ppl didn't realise is buying a car that is over £35k, will lost its value for approximately £10k and above. Also, don't forget if you are good in investing, having £30k cash and invest something will probably earn you back couple of thousands in the following years.
Terence Tai Problem is the people who are savvy like that will never ever buy a car on lease. Maybe a good deal Brand new on hire purchase or something pre registered, or 2-3 year old low mileage cars.
Leasing short term is mostly for businesses and plonkers who wanna look gud
Terence Tai most people who cant afford the depreciation loss of a new vehicle will simply purchase a 3+ year old second hand example with a levelled off depreciation curve, if there's people who are that desperate to be sat in a band new car who cant afford the to take the aformentioned hit they've probably got other financial lifestyle issues to address than to be worrying about investments.
The ideal way of leasing is never to compare with old car. If you are happy with a 3 year old car, there is nothing wrong with it. But it is to recommend to people who always want to new car and capable enough to search for good lease deal, manage their finance and use the extra cash flow to do other investments.
I think the "investment" that we are talking here is not about invest in car, most car depreciate, it is extremely hard to buy a normal car that will make you money in the end. The investment that I am talking about here is to use the cash that were suppose to buy a car to invest in something like property or stock which in long run will make you money.
I know of big problems after an accident and the car is badly damaged. The lease company can be very awkward and unhelpful. A worrying, unwanted problem in stressful situation. Much easier if you own the car yourself.
Van Ged that's GAP insurance come to help
The only think that deters me is the mileage restrictions as I commute far and drive quite, so I think I'll stick to getting used cars but it does seem nice to have a new car every 3 years
You forgot to mention about compulsory 1st service after 1st year of the lease and additional costs at the end of the contract eg. Chippings etc
In the UK press there is talk about "Sub-Primes Cars" (Bank of England).
It adds to your personal debt.
If leased you are tied to the dealer so no chance of moving to another after poor customer service.
I suppose if you have a Tesla, Zoe, leaf or the likes then a lease plan could be good for you as the batteries should be included (sorry a pun).
-Never buy new. If you want 'new,' buy one with sub 3k miles and save 15-20%.
-Never lease.
-Don't care about what other people think ie don't buy a Beemer just because you want respect, no-one cares.
-Only finance if you're raking it in and the finance interest is lower than your current investments.
-Spend money on assets, not depreciating liabilities
Agree most, but only one point, please explain how is an asset not depreciating?Like what? Real Estate? besides?
I thought everything you put money with will definitely depreciating day by day, beside profitable investment, ie Stocks?
Assets, in the sense that I'm referring to them, are anything that makes money (theoretically) and (again, theoretically) increase in value. Stocks, bonds, real estate etc are the typical methods but there's a wide spectrum of choice.
Simplified example: You buy a 20% share in a profitable local business. You take 20% of the annual profit and also benefit from any increase (hopefully) in the value of the company while you own that stake.
If you keep increasing your salary and dumping a lot of it back into assets you'll be singing in 10 years time. Keep spending 50% of your paycheck on a mode of transport and you'll be treading water (or drowning in debt) the rest of your life.
explain why never lease
Sure (all this is just my opinion). Leasing is nearly always the most expensive way to own a car, namely because 1. They're only ever new cars (see point one) and you'll pay a huge premium for that. 2. Over the period of 'ownership' you'll generally pay more than you would via any other method. This combines with the obvious part that is you never own the leased car, so you don't keep it.
In my view, if you HAVE to lease (or finance) then you can't afford it in the first place. Better to buy a reliable used car for cash, save, invest, and be able to easily purchase a nice car + be financially cushty in 10 years time.
what a lot of crap!! a lot of employers now offer discount lease deals through reputable lease firms - allowing employees to lease cars at a discount and usually on 1+ plans.. all they need to do is pay for insurance and fuel.. the discounted costs over the term of the vechicle are SUBSTANTIALLY lower than if they bought the car outright and took the hit on depreciation!.. a few of the companies also offer to sell to the leaser at end of term (you only have to ask for a settlement figure) - otherwise they usually end up in the dealers AUC.. (ironically where some of the other people say they buy from on here!!)...
typical example would be something like a Golf R lease for 1 x £300 and then 23 x £300 (including maintenance) - total cost £7.2k for the lease for 2 years... Golf R is c£32k car - so in 2 years the only way you'd be better off is if the depreciation was less than £7.2k and you hadn't had to pay for any servicing or maintenance!! - a quick check of Auto Trader shows 2 year old Golf R's are going for c£20k (so have depreciating £12k in those 2 years)....
What if you'd like to modify the car? Is it allowed on a lease, finance car?
Modifications such as exhaust system, ECU remap, Stage 1,2,3 upgrades etc?
Taef Dewan lease car no, finance car yes
There's no such thing as stage upgradea
I own a 13 year old car and i recently worked out the difference in cost as to leasing through a work scheme that provides insurance aswell as maintenance the reality of my scenario is that i would be paying an extra 1500 over the three years to have a 17 plate spanker but i still won't go ahead because anything can happen tomorrow let alone three years financially so im just going to play it safe.
Batman's Estranged Cousin made the right choice there. Someone dings your 17plate at the supermarket and you'll have to cough up.
I suppose the terms vary a lot, since all leasing I'm familiar with always lets you buy the car afterwards and also always includes "free" maintenance plan. It's basically just car financing with a HUGE final amount (the worth of the whole car after three years). You pay a little bit extra for the worry-free driving.
Maybe we should encourage leasing because with the leased cars flooding the market as used, they are bringing down the price so more of us can afford a nice, late model car that has already depreciated and has probably been cared for quite well. Win win. :)
Cool video. Like camera work especially dolly effect :)
Leasing is also possible on used cars in some countries, on some conditions.
please change background music as its Free non copyright musical theme used over many Channels. Car Wow is becoming a Brand, must have their own identity.
So much negativity regarding leases here! I'm on my second leased car. I could have a company car but choose to lease as it gives me more choice and actually works out only slightly dearer compared to the BIK tax I would pay if I had a CC. I agree, it may not be a good idea for someone with low or inconsistent income but for anyone with a regular job (doesn't have to be earning mega money) who enjoys new cars, or like me needs something comfortable and reliable to perform their job, a lease is a great idea. In my driving career I have had everything from a £750 14yr old Mitsubish Colt (owned) to a £32k Audi A4 (current car, leased) depending on what I can afford at the time. I would never buy the car I have now because of the depreciation and the fact I don't have £32k going spare! Leasing puts cars that would be out of most people's financial reach well within and why shouldn't we be able to enjoy whatever we want with our own hard earned cash?
How strict do you find the lease company on the return of the vehicle? In regards to condition.
I’m just loving the music
2:33 felt like you've left the car on neutral and forgot to pull the e-brake, wtf, I was worried the car would really start moving
Great, informative video. Brummy accent keeps slipping out though 😄
Paying for a car in the first 3 years is THE most expensive period to own a car, leasing is just paying depreciation. A new BMW 3 series msport 320D with say 14k mileage allowance a year costs around 500 per month plus a deposit so overall around 20k for 3 years ownership. You'll find yourself a 3 year old car with 30k miles on it for 20k or less, a 5 year old with 40K miles for 12k. It's then your car for the next 5 or 6 years and a 9 year old 3 series will still make 5 to 7k! Put the money away in a pot like I do and upgrade every 3 to 4 years. Leasing is just another way for people to buy what they can't be bothered to save up for!
@James Macey with the rise in popularity of PCP a pre-purchase inspection when not going through an AUC system is more crucial than ever, given the PCP owners don't actually own the car and most are only keeping it for 3 years, just like with company cars of old many will be treated with poor mechanical sympathy and thrashed.
Mike Shipton my dads a mechanic and we always buy direct from the owner never from a dealer, I.e. I'll buy from a 50 year old guy and not from a dealer because the car could have been thrashed but some 20 year old. But as you say lots of 3 to 5 year old cars have just come out of lease and could be owned by anyone. It's rumoured that the leasing bubble could burst as they just aren't making the money in the auction second hand that they expected to at the start of the lease, so the monthly rentals will have to increase in the future
Your opening statement about paying all the depreciation and handing the car back being the most expensive way to own a car is completely inaccurate. Firstly you don’t pay anywhere near the depreciation of the vehicle (don’t forget to add 5-6-7k in VAT which is not part of the asset value) and secondly if you did buy it outright you’d take he hit on the full depreciation and say your example was right, in your scenario you’d be left with a depreciating asset which continues to lose money instead of handing it back. There is a reason rich people lease vehicles and stay rich, they have financial managers who prevent them from buying depreciating assets.
Also a 320D doesn’t cost close to £500 per month. You can get an S5 for £500 per month 😂😂😂
Also you don’t own the vehicle at the end of a lease, you hand it back and get another lease in a new car. You seem to have finance and lease mixed up.
When your lease ends and they offer you a new car .do u still need to pay a big lump upfront?
yes
So whats the difference between PCP and PCH? Is there any difference in the monthly price or only the two things stated in the video (being able to end early and purchasing the car)
www.whatcar.com/advice/buying/pcp-or-hp-which-car-finance-option-makes-most-sense/
Can't buy the car at the end!? In America, all dealerships present the the residual price of the vehicle on the purchase agreement and you can buy out your lease at the end of your term
Leasing is for you if you want to replace your cars every 2-3 years, finance or cash is better if you intend to keep the car for 5 years or longer. Personally I would never lease because it would always feel like the car is not mine, plus the limits on mileage and damage make it too constricting. Totally understand why some people lease though, if you can afford it and you always want a newish car then why not.
KingSadim I have heard it's actually really good. Just stay with the dealers though, make sure you get your correct mileage and even if you go over 1000's of miles you know how much it costs and it's usually under 8p per mile so it's not expensive. Even curbed wheel only cost like £50 each. Pretty good if you ask me compared to if you had your own car. I guess it's only good for people who want a new car but it's still around the same cost as buying it and selling it after two years but it comes with less hassle. Not really about not being able to afford the car really
Chatta290 Finance on a new car will evntually reach the point where you are in positive equity, that is where you have real piece of mind because you won't be in debt if you suddenly lost your earning power. That is why I said finance is for people who intend to keep the car for at least 5 years, if you always want the new versions of a model you like then lease is the better option, but it is a costly option as it is a constant monthly cost akin to mortgage levels if we are talking about cars in the 40k bracket.
Work hard. Separate money into different accounts. Be smart. Understand finances.
Max2k - so so true Max
Max2k - shhh. Less competition for us.
Car fleecing, that's another way of putting it.
Buying or leasing is always a gamble .you really have to go through these lease agreements with a fine tooth combe.the garages win every time .they love it when a young person walks in and gets their new fiesta or fiat 500 on pcp and the commission gets the better of the sales men. Try buying a car with cash and there not interested. The garages obviously see more profit leasing these cars out. Cash is king buy a car you can afford and you wont have any problems
Think most of the country are on HP mate.Lucky for me mine was paid in cash.
Do you have to pay the initial payment every time you lease a car, or you do you keep paying the initial payment when the time comes to change the car.
I'll stop you right there Matt. 0:30 leasing is available for pre-owned vehicles.
Are you going ro review of the audi a8
Nik Skrbinc yes please
Well - you've given (mostly) advantages but there's no disadvantages. Please redo for 2018 with new diesel laws / regulations
Thanks
Edit-spelling
2:10 matt is so proud of his timing :-)
I always thought there was bank loans, dealer provided loans,. PCP and in some cases PHP, and as I have done true Leasing from a leading company. Bar very special and rare PCP deals, Leasing is invariably cheaper than PCP as long as you want to stay with a new vehicle and not pay the end of PCP balloon payment?
i like the green skoda - good for march 17th !!
Very helpful...thanks Mat.
Is the green skoda an Octavia VRS, it looks so nice
Daniel Jeyes. You're correct, although I don't like the front end the new Octavia. Nevertheless, people love it, and who am I to criticise?!
Leasing is for me.
I don’t see the point of owning a depreciating asset with maintenance costs like road tax MOT and out of warranty bills.
Dave Ramsey calls it fleecing
Can you do a video on car subscriptions please?
When are you going to review the new Skoda Fabia?
If you buy it you can sell it in a pinch but to each their own.
That dolly zoom though
another thing i hate about leasing is the limited mileage
It's only limited to what you say you will do. If you drive around 5k miles a year, set the lease to 7.5k then you won't have a problem...
Did you forget the set up fee ?
That was the lousiest information ever. You escaped from all the hard questions such as who decides what's normal wear on the car and what's more economic of buying or leasing. Absolute crap
The UK car market is crazy! Insurance is ridiculous, used car market is wierd, regulations are stupid, model spec names like "SE" are still a thing, etc. Why didn't all this die off in the 90's like in the rest of Europe? And don't blame the limited market, hardly any cars sold in Sweden are exported elsewere, despite correct-hand steering!
The best way is not ever to lease, buy or purchase/hire a brand new car. 90% of current 3 year old cars are pretty reliable but even if they are not you can take out cheap cover against this. Leasing a new car is suicidal - you pay a huge amount and own nothing after 3 years. Best combination is to PCP a 3 year old car. You are not taking the deprecation hit - someone leasing it before you paid for all of that. So you have a perfectly good 3 year old car which will cost you less per month than leasing and you own the car after the term if you wish, or you can hand it back as though you had leased it, but for a fraction of the price of leasing a new car.
Is there a company that does leasing and insurance combined? Like Peugeot's version of "just add fuel"
no. 6 could have been explained a bit better. Why do you need a "maintanance package" if you don't own the car?
What is the video effect on 2:33 pls someone write the name of it down
It looks like a dolly zoom
It's called a vertigo effect, where the camera zooms in while dollying out at the same time. This causes the shift in the depth of field that you see.
Oğuzhan Kantarcı yeah that was trippy ... not sure if the camera was moving back or the car moving forward or both or none
DARUDE SANDSTORM XDDDDDDD
It's the dolly zoom effect
That £1800 then £200 isn't going to get you, most folks dream car. The thing is most cars are great, not for 3 years, but for 6 years or more. Cars are only cheap to buy at 1 year old if they aren't that desirable. Try getting A Golf GTI with 8K on its clock at a year old or any such car. You'll pay nearly new (discounted) prices. I reckon you either buy at a few years old or buy new, look for a good deal, then keep it for 6 years. If it's German, it will still look current (ish) when you flog it.
Rs6 had goals
The best way to have the car of your dreams: dream about your own, current car!!! :D
There are a lot of things that are more important than having a car of your dreams... especially if you have a family!
Secondly, if money is not an issue, then you can have any car you'd like... and not needing to lease it. ;o)
very useful tip. thanks
Good review!
I'm just gonna keep using old cars which are way more fun to drive.
If you don't have a good chunk of the money, never finance.
You never know what happens, you could need the money which is impossible to retrieve with a lease for example.
lease is the way to go. If you buy bmw, merc audi they depreciated at a rapid rate. You will find most luxury car buyers lease because if you bought outright your $80,000 car would be more like $17,000 in a dew years
Brook they do it because most cannot afford it but want a luxury brand. Or they are businesses or taxi companies so leasing will help cash flow. Plus, you want these unreliable cars to be in warranty when you own them anyway.
@Brook you do realise that PCP rate you pay for these cars is pretty much covering the depreciation right? Sure you can make the argument that PCP may save you 10-20% of the true depreciation vs paying with cash but the car's still loosing 50% of it's value in the first 3 years either way.
Unless your goal is to be sat in a new vehicle no matter what the cost, from an economic standpoint it makes far more sense to allow the depreciation curve to level off (typically 3+ years) and purchase second-hand, when you come to sell the vehicle the depreciation loss over the term of ownership will be magnitudes lower than what you spent over 3 years on the PCP contract.
yes, its a good tax right off for business owners. The point is the everyday jack would not buy a luxury brand is because the car depreciates rapidly more so than most brands. If jack was wealthy he might, as some people just have lots of expendable income. In Australia you pay a luxury car tax of 33%, so when you buy a car and want to trade it you are 33% poorer straight away. Unfortunately unlike Europe where "luxury" brands are not that expensive we pay through the nose making leasing the best option.
T Tan completely incorrect. Rich people don’t buy depreciating assets outright they lease them and hand them back with minimal losses. That’s why they are rich, money smart. Put it the this way, Jay z and Beyonce have a net worth of $1.4bn, they just bought a house for $88m they put down $33m and mortgaged the rest...when they could clearly buy it outright. However they $50m they didn’t use in liquid cash is invested and earns MORE than their monthly mortgage therefore the house is buying itself. Money smart. Things are not always as simple as you believe. I guarantee all their cars are leased too.
Brook Rich people don’t buy expensive luxury vehicles either. Leasing becomes more common with higher net worths, not less common.
Mat is now living large with Burberry polos
I am all for leasing now almost at the end of a pcp and basically going to at best be about £200 in equality at the end I could have leased a better car for the same amount of money so why bother with a pcp.
Matt, did you say all major car companies offer 3 years warranty sitting in a Mercedes, who offer only 2 years. I thought you are a genius 😀
Pras Cruise 3
In Germany, you can also lease used cars.
Leasing makes complete sense. Why have a large sum of money trapped in a depreciating asset? If I have £20k in a car, 3 years go by and it’ll be worth at least 25% less. If I put that £20k into an appreciating asset, i.e. stocks/shares/property, after 3 years, if the investment is a wise and well considered one. Potentially appreciation could be 10-30%...
I'm looking at this because it seems cheaper than buyin a car and coughing up the maintenance cost
And how many of the commenters have cars on pcp thinking they own them. Deposit, monthly payments and then a balloon payment at the end. This channel reviews new cars , and you have to be out of your mind to go and pay out right or hp for a new or nearly new car . There’s only one way car prices go. Yeah sure save up £15k and get a car then in 3 years what’s it worth... swings and roundabouts. Prefer my cash in the bank and monthly payments for a lease. People that lease DONT want to own the car , that’s whole point.
I get bored of cars quickly, this sounds ideal haha
Good vid. Thanks!