Hi Jim, this may be helpful to your viewers. This year feb I took out a 2 year lease on a Peugeot 2008-e, I paid 12 months deposit, which was around £4800 to bring the monthly payment price down to around £280 per month. Unfortunately my car was in an accident and has been written off, which means the lease contract has ended. The sad thing is I don't get any of that deposit back, so anybody is looking to lease a car and they have a deposit, it's best to stick it into an account and spread it over the cost of the plan as it works out the same price throughout the duration of the lease.
Hi taz did you take any gap insurance I recently got one with my lease and if my car was written off they would give me my initial rental I paid best advise is if you ever do a lease get GAP insurance
@@shebz2509 Hi, yes I had gap insurance thanks. But honestly I know why they want the deposit up front. They get to keep it should you write the car off so I don’t see the point.
Most people don’t understand that the equity you have left in your car is yours. They just compare monthly costs. A neighbour was bragging about their pcp for their new car being only £300 a month compared to leasing being a bit more. Deal. Except they’d used a £5000 deposit on their pcp from the equity left in their old car. When I said that you have to compare the same deposit for both deals they simply didn’t understand it. They think genuinely that the dealer is giving them £5000 as an incentive to take the pcp. They don’t understand they could sell their car and have that £5000 and use some of it to lease far cheaper…
I’ve done both in the past , my only negative to lease is your stuck in a contract , unless that’s changed , my last one was my Volvo XC60 back in 2015
You can get out of them usually for 50% of the remaining payments if you really want, as the payments are so much cheaper than a PCP it’s often not that much of a downside when you think about it.
I recently finished a three year lease and near the end asked what they wanted for the car if I bought it. When I took what they wanted and added it to the total of the payments I had made over the three years it was almost exactly the same as the original invoice price of the car. So I had a three year interest free loan with leasing.
Our family car is now coming to the end and we’re in a similar position although ours would have actually cost around £1300 less than the invoice. I don’t shout about it too often though as, given that the price is not revealed until the end of the lease, you can’t really rely on it. 👍
OK, this works, if you always want to drive very new car. But if you hold on to the bought car for another 3 years, this change quite alot. Working cars always have value and the value is never going to zero as long as the car works fine. On the other hand, the leasing customer has to find another leasing contract to have a car. The difference in value now, is the difference you have to pay to have a new car in comparison to an used 3 to 6 year old car. Many people chose not to follow up with a 2nd leasing.
With a used car you’ve got to factor in cost of repairs, road tax etc too, not purely depreciation. It’s not for everyone but it’s can be a very smart idea for many. We’re on our 3rd private lease, and I forget how many business ones I’ve had over the years. It works for us.
I am a senior with maybe 5 good driving years ahead. I leased a 2020 Subaru Forester, have driven it for 2 years, love the car, hate the lack of power. I still owe one year on my lease but the payout figure is super low compared to what my S is worth today. Just leased a 2023 Subaru Outback w/turbo. Actually came out better, will have a new car w/ 3 year warranty, lease payments about $50 less per month. Perfect deal for me personally.
Only issue I have with leasing that puts me off is that if my business falls through the floor during the term of the lease, then I’m on the hook for the whole lease amount. On a PCP there are ways of wriggling out of it, even if it costs a little bit.
In this scenario Chris that difference is massive. To get out of a lease you generally have to pay back 50% of the remaining payments. In this case 50% of the remaining payments would still be less than the amount extra that a PCP costs, even with a very early cancellation. Thanks for watching mate.
If worried Chris then don’t go for a new car. Get a loan for a £10k reliable one and see how the economy / your personal finances are in a couple of years. People are obsessed with having a new car and it’s not going to be pretty when people won’t be able to afford to pay them back soon.
Jim, another great breakdown. Your previous videos on this opened my eyes to leasing more, so I used your link to get a Kia Niro through lease loco, really happy. The Passat nightmare still isn't concluded unbelievably, but one of your links in an old video to RejectMy have been super helpful in pushing things to near conclusion
After the PCP deal has finished and you’ve cleared the finance there’s no monthly payment. If you carry on the lease then you’ve another monthly payment.
Good video, thank you. We are weighing up our options trying to return a Model 3, 4yr lease/ 3 remaining. Questionable morals at play, this pound of flesh just gets heavier. Keep up the great content!
I have leased vehicles continually since 1996. I have looked at a PCP several times and still went back to leasing. I work in finance, money is what I do. I would never take a PCP as the only real winners are the dealers and manufacturers.
Good video and a valid comparison. However, why not buy the used and run it for 5 years? What strikes me is that running a car is hugely expensive and if you just want transport - ie don’t care about prestige, performance etc - then buying a good used example is the most economic. Striving for no payments should be the way forward.
Buying used is a fairly broad term, if you're buying nearly new with a PCP then much of what you see in this video still applies, infact I'll be doing a video showing that next week. If you're talking about buying an old car for a few grand and running it into the ground then yes you can do very well, you can also find yourself with a lemon that costs you an arm and a leg - luck is a big factor. No monthly payments is a great idea in theory but if you're spending several hundred or thousands every year in unexpected repairs that can be a major issue for a lot of us. There's no universal right and wrong with this stuff, it's whatever suits you and your financial situation, along with your appetite for risk, the best.
@@DefinitelyNotAGuru I’m just trying to point out that getting stuck in a PCP/lease cycle is costly in the long term. Buying a 1 or 2 year old car and running for, say, 5 years is a more prudent way of getting transport. For example, £400 per month is not seen as an expensive per month payment, however that’s £14400 over three years, with a £1200 deposit on top. Used cars are not that expensive/maintain, all you need is to find a local reputable garage, most towns have at least one, and keep it maintained.
Good video. I had to explain to my elderly father-in-law, who assumed that all his neighbours were minted in view of their £40k plus new cars, that they're essentially renting them. This very good video shows exactly that. I'm currently driving my third car since 2001. All three were exceptional used models, I look after them and eventually sell them as exceptional examples. It'd be interesting to compare my costs over 21 years with changing every three years via a lease/PCP. PCPs and personal lease contract were invented to support an over-priced over-producing motor industry. However, an ex-PCP/lease makes for a very good used purchase.
I’ve done a couple of videos in the past comparing 3 year old used on finance vs new lease. Each to their own at the end of the day but quite often driving a brand new car (if you’re a bit canny) can cost a similar amount to a used one with the added benefit of full manufactures warranty and no road tax etc then it’s worth running the numbers. PCP in my opinion rarely benefits anyone other than the dealership whilst leasing essentially cuts them out.
@@DefinitelyNotAGuru I'm on 0% PCP, granted they don't run many of these events (neither did they 3 years ago) but if you do time a promotion wave 0% can work out cheaper than a lease and includes option to buy. My PCP is currently sitting £6k-7k in equity depending on which buyer website you look at (Cazzoo, WBAC) and when, and more if selling privately. I reckon by next May when I'll sell this car, I'll be at least £3k up which means I effectively paid no deposit and £287 per month for an Ateca FR Sport 1.5 TSI (one of the top trims). The lease equivalent back when I signed was £320+ and didn't include 5 year warranty. I got mine through Drive The Deal and would always recommend looking for niche deals rather than just what comparison websites show you.
@@bodrulm1 there are some one off cases mate, those who got a car 3 years ago really lucked in and hit the most extraordinary patch of car prices in history. You were in a 0% deal too mate so sounds like right deal at exactly the right time. You should buy a lottery ticket this weekend, get one for me too 👍🍀
I have a car on hp. So far I have no issues paying it because I’m in a secure job. I will do it again going forward. One piece of advice I would give is choose a car you will enjoy driving. I have a Seat Leon FR 1.4. I wish I went with a VW Golf R instead
Another good video but PCP deals are 50/50 as lots of people still end up in negative equity. Personally I have no interest in trying up loads of capital in something that will depreciate and the end of super inflated prices is coming to an end pretty soon. Leasing works for lots of reasons such as low entry price and no disposal headaches.
Still think it's better and cheaper to buy a car new, look after it, keep it for 10 years plus, then still be able to sell it for a few £. If you don't need to have the latest new thing, this is definitely cheaper and more eco friendly.
I think everyone has different views on this….personally I have never bought a new car in my life and I’ve been driving 39 years and have always made good money. I either look for a very good used car, or I would lease a new car. Buying a new car would only make sense to me if I was able to get a huge discount which offsets the massive initial depreciation. Basically like in the video I work the figures, and which ever option comes out cheaper over 2-3 years that’s what I go with. My mission is to keep as much of my money in my pocket as I can.
Great informative video Jim. Just goes to show you the difference . Too many people automatically jump at the first set of figures. Any chance of doing a similar video on a nearly new secondhand car to see the difference ?
Hiya, just to say I found your video good and informative but one bit of constructive criticism would be the background was a tad too bright to look at.. when you put the £4,564 better off on the screen in green it was burned into my eyes a few seconds after 😂
I've leased my last 3 cars but have gone back to pcp. As you say, it's very subjective and depends on predicting future value. We part exchanged a Honda Jazz a year ago and ended up with a ton of equity due to the market, allowing a nice upgrade. So I've taken the view that whilst residuals cannot hold up at the current rate, the second hand market has gone through a revaluation process that will result in more equity being created within pcp contracts. Supply chain issues will continue to affect values for a long time as they create gaps in numbers which cannot be compensated after the event. Stellantis have issues across their brands . If you can get hold of one you like it will probably perform well financially when you come to sell. The new peugeot 308 will be a winner I think. I went for a honda civic mk11 as I can't install a charger at home but waiting times are already months and I think they will hold up well. Just my thoughts. Thanks for reading. Keep up the good work!
You are right.....BUT..... youve picked a car that is unrealistically cheap at 211 pcm on a lease, the manufacturer is financially supporting that offer with large volume pack discounts. Realistically a 30k car should be £350 a month on a lease . I suspect its alot closer on an Audi A3 for example.But overall your right, if you dont care what you drive, there is always a good deal out there in leaseworld.
Great breakdown and something I always do. The only thing I would do differently is to make the PCP over 4 years. This will bring the monthly and total down and you can still swap after 3 years if required. Balloon payment is just replaced by a settlement figure.
I am looking at an Aston DB11 V8 and i have always purchsed a 5 year old low milage car from a main deailership a 2017 car is now around 80k the car new was around 170k so its nearly 100k lower than the new price I will keep the car until its 10 years old and the car will have a second hand value of around 50k so five years for 30k is around £500 for an Aston
Excellent vid mate, I finally hit the subscribe button.. awesome content. I am a sucker for a good XLS too and often compare deals the same way as my 3 year lease is up for renewal now. Some external factors are also at play influencing decision making. 1-Supply chain delays I had both a Sportage and Tuscon on lease order but they have bumped the delivery now to April 2023 after signing contract in July. It may also be worth considering one of the all-in subscriptions services like Hyundai Mocean or ONTO - i did the rough sums and there is not much in it considering its hassle free with insurance included too but still over the 3 years a competitive lease still beats it. Swings and roundabouts - lease you pay the bigger up front deposit, but subscription monthly payment is higher but extrapolated it tends to even out and your TCO [not ownership I know] comes to a similar figure. Food for thought.
Cars are getting so expensive that you'll be able to do nothing else but lease it. Adobe did this first 9 years ago. A subscription is a more stable income stream but you'll 'own nothing and be happy'. The car market seems broken. In the u.s repos are growing and some suggestion there that subprime car lending has been going on. So think 2008 but with car finance. With parts shortages and high prices every manufacturer seems to want to build 1 less car than demand to keep values high. I've made the decision to sit it out and keep my 20 year old car going for a bit. I really need to change it but I'm not prepared to pay these prices.
Unlike adobe, car manufacturers have way too much competition. No the new trend is removing options from cars. You buy the full vehicle and must pay a sub to unlock all featuees.
I think also worth considering is that once your lease is up, you have to cough up another deposit for your next car (if we're assuming long term this is your car owning strategy). Obviously this will vary car-to-car but I recently looked into leasing an Ioniq 5 Premium 77kwh. While superficially leasing looked a much better deal, if you factor your next deposit into your average monthly cost, it works out around the same price and there's less flexibility with future ownership on a lease. I do appreciate your insight though, and it has encouraged me to think about leasing in a lot more detail. At the moment, I can't stomach the idea of having no equity in the car. I'm not the type of person to religiously trade my PCP car in when the deal is up, and if I was going brand new I'd hope to use the vehicle for 5 years minimum. So for me personally, I think PCP represents slightly better value over the long term but I encourage everybody to do their own sums and have a good hard look at the numbers. All things considered, I do think financing or buying cash represents better value long term but leasing can be cost effective if you're the type of person to get a new car every 3 years or so. With all that said, I did find some tremendous value deals on leaseloco. The qashqai in particular looks like a fantastic deal and something I would've considered had a Qashqai been a car I wanted.
You also have to fork out for another deposit if you do a PCP or any other kind of finance. Is it worth paying 50% more to have a tiny bit of equity that still makes you much poorer at the end of the deal? Surely not… The only way around the deposit issue is not taking car finance and being a cash buyer in which case you lose your big chunk of cash (100% deposit). If this video doesn’t show you the value in a lease vs a PCP I’m afraid that nothing is likely to. It’s not for everyone 👍
PCP, in my book, is a poor way to buy a car. Look at loans or HP before PCP (most of the time). WIth a loan you're effectively a cash buyer so can source a new car using a buying service, saving on the car cost and the finance cost. Leasing deals and PCPs will generally have a mileage cap, the more you increase the mileage, the more the cost will go up. As always, shopping for the best deal and not being too specific about the car will give you the best results with leasing.
I don't want to own a car, been leasing now for quite some time. PCP I did once but the balloon payment at the end makes it a no-no. I have been with the same lease company all the time - I find them friendly and flexible. I can put down a larger deposit if I wish (I usually do) to reduce the monthly payouts -- once I have completed 55percent of my lease they will let me pay off any balance I wish to pay at 55percent of the remaining balance. Without asking they did help me on one car I had a problem which sort of cemented my loyalty to them. I don't mind saying who if anyone wants to know.
@@arthurblundell6128 Thanks, I’m actually leasing through them. I’m 16 months into a 3 year lease. Had no contact with them at all since the initial setup. Will be interesting to see if they make me any sort of offer to purchase.
@@andyburns6496 you could surrender the lease now for 55percent. Unless the situation has changed, you would be unable to purchase the car -- leasee's are not eligible
@@DefinitelyNotAGuru would you ever do a comparison if renting your own car profitable? Or able to do this thru a pcp or a lease? For example you can rent your car via an app called turo?
Hearing all the news of the feds raising interest rates and will continue to raise them, I ended up buying my lease. It’s 2019 Chevy Silverado trailboss. I still had another 7 months to go, and feel like the price was much higher than it should be. At the end of lease it was suppose to be a bit lower, but either way I did it and locked in a 3.39% interest rate for 5 years. Trucks are expensive and with the shortage I just wanted to keep it. Not sure if it was the right decision or not
This is what I've been doing to justify getting a new car on lease. But I've been comparing a 3yeat old plus adding the cost of tyres, warranty, brakes all round, other services, time detailing, finance costs etc. And deducting what the advertised PCP balloon payment is. Suddenly that 5grand a year lease cost doesn't sound too bad for a brand new £37000 car... Now just waiting for prices to fall back to my target price. Plus I will have £14000 value in my current owned car sitting happily in the bank. Downside is that my current Car which was 3 years old 3 years ago only cost £16500 when prices were good. Plus all the above extras totalling to around 21000 is now worth 14000 (now that prices are high) costing only 7000 over the 3 years for a 520d which makes the lease sound high. But I know that was luck and won't happen again. Question though. When leasing, in terms of credit does the leasing company hold against you the full cost of a car on file (£37000) or just the cost of the lease (£15000) if you know what I mean. Thanks for the videos and making me aware of leasing.
I have PCP'd before and currently on a lease. With the PCP, the value of the car minus any deposit goes on your credit file, with a lease it is just the value of the lease. So your monthy figure multiplied by the number of months agreed to. Spot on.
I think you need to keep your car for maybe 7 years and have very few reliability problems for it to be worth buying and not many people do or get that these days
@@DefinitelyNotAGuru I dont feel the cist of leasesing vans is worth it I personally buy all my vans but i tend to buy a 5 year old van 100000 miles ish pre covid nice spec 5k the currently cost is more like 2.5x that atm and I feel the cost don't reflect that I.e why I buy vans not lease just my opinion I bought vans pre covid so it's changed so much
@@darrenquarterman2611 Yeah, I'm less familiar with the van side of things mate but depending on what you use your vans for I'd probably stick to what you're doing. A lot depends on your tax position and income etc of course.
Yes you can but you don’t k is the price until a couple of months before the end of the lease so it’s impossible to compare. In my book leasing is a great way to lease, if you’d rather buy you’re often better off with a bank loan.
@@DefinitelyNotAGuru yes thank you. Just became confused as you told me earlier you could buy the lease but now seen you did not mention you could buy the lease if you wanted to. Nice video thanks.
Great content! However, this is only true if you are looking at the first 3-4 years of ownership - over a longer period you're hiding the true cost of leasing. If you want to keep your car say 5-9 years which is much more economical, you will have gone through 3 lease vehicles in that period - the PCP, buyout then run is suddenly FAR cheaper. Depreciation is at it's maximum in the first few years. So if you want the cheapest form of car ownership, as always you are still better off buying a 3+ year old car and driving the bloody thing until it's 10+ years old. You will save a shed load of money on motoring despite maintenance costs.
It should cost more To have a new car rather than an old bone shouldn’t it? Most people will pay a ton in repairs and road tax during that time. You also have to factor in the bonus of getting to choose a brand new car every 3 years and having a set car payment rather than getting unexpected bills at any moment. I’ll probably do another video in a few weeks on a longer ownership. PCP is the salesman’s dream.
@@DefinitelyNotAGuru indeed agree. There is a significant cost to having a new car every 3 years though, especially that deposit and no resale value, no matter which way you look at it. It's hidden. If you want a new car regularly, leasing is still the best. If you want decent motoring and value for money, buying a car a few years old and keeping it for a long while is the way to go. Buy a Toyota/Honda, go on extra holidays with the family instead. Stick the money in investments. Whatever works. But leasing is not comparatively cheap motoring when you step back and given most people are in debt, we should think twice. Thanks for the content.
@@bodrulm1 if you’re buying your older car with cash then it’s a good option for some but if you’re buying on a PCP the financing the balloon (as most do) it’s a totally different kettle of fish that will probably see you paying much more for your old car over 10 years than most do for a new one. As I said, I’ll do a video on it soon.
Oh thought you were going to add the HP finance into it as it was on screen. Should leave you about £4k better off than the PCP. But still £500 worse than the lease. Never been a fan of PCP. Either lease it or get a cheap rate car loan.
@@DefinitelyNotAGuru I don't think you will currently get a bank loan for less than the 3.8% given in your example. So securing the finance against the car seems better than a personal loan at this moment in time. Plus the bank is far more likely to finance £23k on a car than on an unsecured personal loan. Obviously this will be different for each individual but fair rates seem to top out at £15k. Now walking into a dealer and asking for HP finance (with the dealer getting their affiliate fee) is definitely not usually the best deal. So I don't think HP should be dismissed so easily, as in your very example it's not a mile away from the leasing cost. If you end up doing more miles than you originally thought then the HP might work out cheaper after the lease mileage charges than the lease.
@@DefinitelyNotAGuru fair point buddy, I'd be really interested in these total costs including resale in basic English with viewable figures with a mileage of say 10k per year, even just one option as that would give me a comparison
@@geoffboyd2895 it’s really hard to do much more than I’ve done here Geoff as resale figure can only be a guess at the moment with used prices being so volatile. Putting mileage up to 10k probably puts £15/£20 per month on monthly payments of both options 👍
@@DefinitelyNotAGuru fair play mate, really enjoy ur videos and it's a subject of interest to myself, just so many numbers to crunch and just want to make the right call, I'm leaning to lease big time, just don't want to go with a low milage and then get battered with charges for going over, last year ended up driving to Spain and back on the off chance and I like the fact car milage wasn't even a consideration at the time, first world problems I know!
@@geoffboyd2895 excess mileage charges are sometimes really low but they vary a lot with each deal. I’ve see. Then as low as 3p and as high as 40p. One of my own work cars went 11k over the agreed amount after 3 years and it cost us £600. It was actually about £100 cheaper than if we’d have leased it with a higher limit.
For what its worth, I believe that you are essentially just leasing with a pcp anyway and the "equity" is purely notional when you are on a cycle of 3 year replacement. The benefit of a lease being that the full value of the car plus the interest is not loaded onto your credit profile. The benefit of a pcp being easier / cheaper to get out of early in most cases. You could also save for the balloon payment in parallel to making the monthly payments to own the car.
✅ 𝗟𝗲𝗮𝘀𝗲𝗟𝗼𝗰𝗼 : leaselo.co/notaguru-personal-car-leasing
Hi Jim, this may be helpful to your viewers. This year feb I took out a 2 year lease on a Peugeot 2008-e, I paid 12 months deposit, which was around £4800 to bring the monthly payment price down to around £280 per month. Unfortunately my car was in an accident and has been written off, which means the lease contract has ended. The sad thing is I don't get any of that deposit back, so anybody is looking to lease a car and they have a deposit, it's best to stick it into an account and spread it over the cost of the plan as it works out the same price throughout the duration of the lease.
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Hi taz did you take any gap insurance I recently got one with my lease and if my car was written off they would give me my initial rental I paid best advise is if you ever do a lease get GAP insurance
@@shebz2509 Hi, yes I had gap insurance thanks. But honestly I know why they want the deposit up front. They get to keep it should you write the car off so I don’t see the point.
In Sweden, leasing is super popular. I’ve leased my last 2 cars and will lease my next one. It’s not for everyone but for me it’s perfect.
That’s it mate, people get very upset about the very idea at times but not everything is for everyone and let’s all just be cool with that. 👍👍👍
Most people don’t understand that the equity you have left in your car is yours. They just compare monthly costs. A neighbour was bragging about their pcp for their new car being only £300 a month compared to leasing being a bit more. Deal. Except they’d used a £5000 deposit on their pcp from the equity left in their old car. When I said that you have to compare the same deposit for both deals they simply didn’t understand it. They think genuinely that the dealer is giving them £5000 as an incentive to take the pcp. They don’t understand they could sell their car and have that £5000 and use some of it to lease far cheaper…
Agreed mate
I’ve done both in the past , my only negative to lease is your stuck in a contract , unless that’s changed , my last one was my Volvo XC60 back in 2015
You can get out of them usually for 50% of the remaining payments if you really want, as the payments are so much cheaper than a PCP it’s often not that much of a downside when you think about it.
I recently finished a three year lease and near the end asked what they wanted for the car if I bought it. When I took what they wanted and added it to the total of the payments I had made over the three years it was almost exactly the same as the original invoice price of the car. So I had a three year interest free loan with leasing.
Our family car is now coming to the end and we’re in a similar position although ours would have actually cost around £1300 less than the invoice. I don’t shout about it too often though as, given that the price is not revealed until the end of the lease, you can’t really rely on it. 👍
Very interesting stuff, and the minefield needs to be explained. Well done. Thank you.
Thanks 🙏
OK, this works, if you always want to drive very new car. But if you hold on to the bought car for another 3 years, this change quite alot. Working cars always have value and the value is never going to zero as long as the car works fine. On the other hand, the leasing customer has to find another leasing contract to have a car. The difference in value now, is the difference you have to pay to have a new car in comparison to an used 3 to 6 year old car. Many people chose not to follow up with a 2nd leasing.
With a used car you’ve got to factor in cost of repairs, road tax etc too, not purely depreciation. It’s not for everyone but it’s can be a very smart idea for many.
We’re on our 3rd private lease, and I forget how many business ones I’ve had over the years. It works for us.
Great video Jim 👍👍... Because I'm thick as a plank and haven't a clue is it good value to take a lease at say 48/60 months
I think they real value is in 3 year deals, you’ve got warranty, no mot to worry about etc.
@@DefinitelyNotAGuru
Good point 👍😁
Good explanation Jim, thanks.
Glad it was helpful!
I am a senior with maybe 5 good driving years ahead. I leased a 2020 Subaru Forester, have driven it for 2 years, love the car, hate the lack of power. I still owe one year on my lease but the payout figure is super low compared to what my S is worth today. Just leased a 2023 Subaru Outback w/turbo. Actually came out better, will have a new car w/ 3 year warranty, lease payments about $50 less per month. Perfect deal for me personally.
Great
Good timing Jim, finally getting round to purchasing some new wheels 👀👍🏻
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Exactly the excel sheet I was looking for
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Only issue I have with leasing that puts me off is that if my business falls through the floor during the term of the lease, then I’m on the hook for the whole lease amount. On a PCP there are ways of wriggling out of it, even if it costs a little bit.
In this scenario Chris that difference is massive. To get out of a lease you generally have to pay back 50% of the remaining payments. In this case 50% of the remaining payments would still be less than the amount extra that a PCP costs, even with a very early cancellation. Thanks for watching mate.
If worried Chris then don’t go for a new car. Get a loan for a £10k reliable one and see how the economy / your personal finances are in a couple of years.
People are obsessed with having a new car and it’s not going to be pretty when people won’t be able to afford to pay them back soon.
Jim, another great breakdown. Your previous videos on this opened my eyes to leasing more, so I used your link to get a Kia Niro through lease loco, really happy. The Passat nightmare still isn't concluded unbelievably, but one of your links in an old video to RejectMy have been super helpful in pushing things to near conclusion
Glad it was helpful!
After the PCP deal has finished and you’ve cleared the finance there’s no monthly payment. If you carry on the lease then you’ve another monthly payment.
Correct. You may have paid a third less though…..
Good video, thank you. We are weighing up our options trying to return a Model 3, 4yr lease/ 3 remaining. Questionable morals at play, this pound of flesh just gets heavier. Keep up the great content!
Given the current value of a used model 3 I hope they make it easy for you. 👍
I have leased vehicles continually since 1996. I have looked at a PCP several times and still went back to leasing. I work in finance, money is what I do. I would never take a PCP as the only real winners are the dealers and manufacturers.
I agree, I've spent 25 years + in financial services too.
Good video and a valid comparison. However, why not buy the used and run it for 5 years? What strikes me is that running a car is hugely expensive and if you just want transport - ie don’t care about prestige, performance etc - then buying a good used example is the most economic. Striving for no payments should be the way forward.
Buying used is a fairly broad term, if you're buying nearly new with a PCP then much of what you see in this video still applies, infact I'll be doing a video showing that next week. If you're talking about buying an old car for a few grand and running it into the ground then yes you can do very well, you can also find yourself with a lemon that costs you an arm and a leg - luck is a big factor. No monthly payments is a great idea in theory but if you're spending several hundred or thousands every year in unexpected repairs that can be a major issue for a lot of us.
There's no universal right and wrong with this stuff, it's whatever suits you and your financial situation, along with your appetite for risk, the best.
@@DefinitelyNotAGuru I’m just trying to point out that getting stuck in a PCP/lease cycle is costly in the long term. Buying a 1 or 2 year old car and running for, say, 5 years is a more prudent way of getting transport. For example, £400 per month is not seen as an expensive per month payment, however that’s £14400 over three years, with a £1200 deposit on top.
Used cars are not that expensive/maintain, all you need is to find a local reputable garage, most towns have at least one, and keep it maintained.
@@adrianwhitehead1950 fair enough mate but it’s like chatting about the price of oranges on a video about apples. Totally get your point 👍
Good video. I had to explain to my elderly father-in-law, who assumed that all his neighbours were minted in view of their £40k plus new cars, that they're essentially renting them. This very good video shows exactly that. I'm currently driving my third car since 2001. All three were exceptional used models, I look after them and eventually sell them as exceptional examples. It'd be interesting to compare my costs over 21 years with changing every three years via a lease/PCP.
PCPs and personal lease contract were invented to support an over-priced over-producing motor industry. However, an ex-PCP/lease makes for a very good used purchase.
I’ve done a couple of videos in the past comparing 3 year old used on finance vs new lease. Each to their own at the end of the day but quite often driving a brand new car (if you’re a bit canny) can cost a similar amount to a used one with the added benefit of full manufactures warranty and no road tax etc then it’s worth running the numbers. PCP in my opinion rarely benefits anyone other than the dealership whilst leasing essentially cuts them out.
@@DefinitelyNotAGuru I'm on 0% PCP, granted they don't run many of these events (neither did they 3 years ago) but if you do time a promotion wave 0% can work out cheaper than a lease and includes option to buy. My PCP is currently sitting £6k-7k in equity depending on which buyer website you look at (Cazzoo, WBAC) and when, and more if selling privately. I reckon by next May when I'll sell this car, I'll be at least £3k up which means I effectively paid no deposit and £287 per month for an Ateca FR Sport 1.5 TSI (one of the top trims). The lease equivalent back when I signed was £320+ and didn't include 5 year warranty. I got mine through Drive The Deal and would always recommend looking for niche deals rather than just what comparison websites show you.
@@bodrulm1 there are some one off cases mate, those who got a car 3 years ago really lucked in and hit the most extraordinary patch of car prices in history. You were in a 0% deal too mate so sounds like right deal at exactly the right time.
You should buy a lottery ticket this weekend, get one for me too 👍🍀
@@DefinitelyNotAGuru 😂
I have a car on hp. So far I have no issues paying it because I’m in a secure job. I will do it again going forward. One piece of advice I would give is choose a car you will enjoy driving. I have a Seat Leon FR 1.4. I wish I went with a VW Golf R instead
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Another good video but PCP deals are 50/50 as lots of people still end up in negative equity. Personally I have no interest in trying up loads of capital in something that will depreciate and the end of super inflated prices is coming to an end pretty soon. Leasing works for lots of reasons such as low entry price and no disposal headaches.
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Still think it's better and cheaper to buy a car new, look after it, keep it for 10 years plus, then still be able to sell it for a few £.
If you don't need to have the latest new thing, this is definitely cheaper and more eco friendly.
OK, I would personally never buy a new car. Each to their own.
I think everyone has different views on this….personally I have never bought a new car in my life and I’ve been driving 39 years and have always made good money. I either look for a very good used car, or I would lease a new car. Buying a new car would only make sense to me if I was able to get a huge discount which offsets the massive initial depreciation. Basically like in the video I work the figures, and which ever option comes out cheaper over 2-3 years that’s what I go with. My mission is to keep as much of my money in my pocket as I can.
Great informative video Jim. Just goes to show you the difference . Too many people automatically jump at the first set of figures. Any chance of doing a similar video on a nearly new secondhand car to see the difference ?
Yes mate, I’ll probably do one in a couple of weeks.
Hiya, just to say I found your video good and informative but one bit of constructive criticism would be the background was a tad too bright to look at.. when you put the £4,564 better off on the screen in green it was burned into my eyes a few seconds after 😂
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Great video!
Thanks
I've leased my last 3 cars but have gone back to pcp. As you say, it's very subjective and depends on predicting future value. We part exchanged a Honda Jazz a year ago and ended up with a ton of equity due to the market, allowing a nice upgrade. So I've taken the view that whilst residuals cannot hold up at the current rate, the second hand market has gone through a revaluation process that will result in more equity being created within pcp contracts. Supply chain issues will continue to affect values for a long time as they create gaps in numbers which cannot be compensated after the event.
Stellantis have issues across their brands . If you can get hold of one you like it will probably perform well financially when you come to sell. The new peugeot 308 will be a winner I think.
I went for a honda civic mk11 as I can't install a charger at home but waiting times are already months and I think they will hold up well.
Just my thoughts. Thanks for reading. Keep up the good work!
Each to his own with everything. The only right choice is your choice 👍
You are right.....BUT..... youve picked a car that is unrealistically cheap at 211 pcm on a lease, the manufacturer is financially supporting that offer with large volume pack discounts. Realistically a 30k car should be £350 a month on a lease . I suspect its alot closer on an Audi A3 for example.But overall your right, if you dont care what you drive, there is always a good deal out there in leaseworld.
There’s also a massive discount on the numbers I’m using for cash / PCP mate so it’s a very fair example.
Great breakdown and something I always do. The only thing I would do differently is to make the PCP over 4 years. This will bring the monthly and total down and you can still swap after 3 years if required. Balloon payment is just replaced by a settlement figure.
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And of course for the self employed Leasing is 100% tax deductible - while for a PCP you can only offset the depreciation.
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I am looking at an Aston DB11 V8 and i have always purchsed a 5 year old low milage car from a main deailership a 2017 car is now around 80k the car new was around 170k so its nearly 100k lower than the new price I will keep the car until its 10 years old and the car will have a second hand value of around 50k so five years for 30k is around £500 for an Aston
Ok
Excellent vid mate, I finally hit the subscribe button.. awesome content. I am a sucker for a good XLS too and often compare deals the same way as my 3 year lease is up for renewal now. Some external factors are also at play influencing decision making. 1-Supply chain delays I had both a Sportage and Tuscon on lease order but they have bumped the delivery now to April 2023 after signing contract in July. It may also be worth considering one of the all-in subscriptions services like Hyundai Mocean or ONTO - i did the rough sums and there is not much in it considering its hassle free with insurance included too but still over the 3 years a competitive lease still beats it. Swings and roundabouts - lease you pay the bigger up front deposit, but subscription monthly payment is higher but extrapolated it tends to even out and your TCO [not ownership I know] comes to a similar figure. Food for thought.
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Cars are getting so expensive that you'll be able to do nothing else but lease it. Adobe did this first 9 years ago. A subscription is a more stable income stream but you'll 'own nothing and be happy'. The car market seems broken. In the u.s repos are growing and some suggestion there that subprime car lending has been going on. So think 2008 but with car finance. With parts shortages and high prices every manufacturer seems to want to build 1 less car than demand to keep values high. I've made the decision to sit it out and keep my 20 year old car going for a bit. I really need to change it but I'm not prepared to pay these prices.
👍to be fair, I think the prices in this video are really good value.
Unlike adobe, car manufacturers have way too much competition. No the new trend is removing options from cars. You buy the full vehicle and must pay a sub to unlock all featuees.
Interesting stuff thanks for your efforts 👍
Thanks Mate
I leased a picasso a few years back. 3 year deal was a lot better than buying
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I don't get it? the fact that you can keep the car for the next 10 years? how's the costs compared now?
Depends on your luck 🍀 💰
I think also worth considering is that once your lease is up, you have to cough up another deposit for your next car (if we're assuming long term this is your car owning strategy). Obviously this will vary car-to-car but I recently looked into leasing an Ioniq 5 Premium 77kwh. While superficially leasing looked a much better deal, if you factor your next deposit into your average monthly cost, it works out around the same price and there's less flexibility with future ownership on a lease.
I do appreciate your insight though, and it has encouraged me to think about leasing in a lot more detail. At the moment, I can't stomach the idea of having no equity in the car. I'm not the type of person to religiously trade my PCP car in when the deal is up, and if I was going brand new I'd hope to use the vehicle for 5 years minimum. So for me personally, I think PCP represents slightly better value over the long term but I encourage everybody to do their own sums and have a good hard look at the numbers. All things considered, I do think financing or buying cash represents better value long term but leasing can be cost effective if you're the type of person to get a new car every 3 years or so.
With all that said, I did find some tremendous value deals on leaseloco. The qashqai in particular looks like a fantastic deal and something I would've considered had a Qashqai been a car I wanted.
You also have to fork out for another deposit if you do a PCP or any other kind of finance. Is it worth paying 50% more to have a tiny bit of equity that still makes you much poorer at the end of the deal? Surely not…
The only way around the deposit issue is not taking car finance and being a cash buyer in which case you lose your big chunk of cash (100% deposit).
If this video doesn’t show you the value in a lease vs a PCP I’m afraid that nothing is likely to. It’s not for everyone 👍
Can't find any videos on higher mileage deals say 25k per annum. Do the figures still work similar in comparison for leasing and pcp?
PCP, in my book, is a poor way to buy a car. Look at loans or HP before PCP (most of the time). WIth a loan you're effectively a cash buyer so can source a new car using a buying service, saving on the car cost and the finance cost. Leasing deals and PCPs will generally have a mileage cap, the more you increase the mileage, the more the cost will go up. As always, shopping for the best deal and not being too specific about the car will give you the best results with leasing.
I don't want to own a car, been leasing now for quite some time. PCP I did once but the balloon payment at the end makes it a no-no. I have been with the same lease
company all the time - I find them friendly and flexible. I can put down a larger deposit if I wish (I usually do) to reduce the monthly payouts -- once I have completed
55percent of my lease they will let me pay off any balance I wish to pay at 55percent of the remaining balance. Without asking they did help me on one car I had a
problem which sort of cemented my loyalty to them. I don't mind saying who if anyone wants to know.
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I’d like to know the name of that leasing company
@@andyburns6496 VWFS
@@arthurblundell6128 Thanks, I’m actually leasing through them. I’m 16 months into a 3 year lease. Had no contact with them at all since the initial setup. Will be interesting to see if they make me any sort of offer to purchase.
@@andyburns6496 you could surrender the lease now for 55percent. Unless the situation has changed, you would be unable to purchase the car -- leasee's are not eligible
Good work
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@@DefinitelyNotAGuru would you ever do a comparison if renting your own car profitable? Or able to do this thru a pcp or a lease? For example you can rent your car via an app called turo?
@@haucapone I know nothing about it I’m afraid
Lease also need to factor in the cost of Gap Insurance which is a must.
It’s optional on all types of car finance. PCP, HP etc is no different.
I would have gap insurance ( not from dealer) with PCP or any other method as well imo
Hearing all the news of the feds raising interest rates and will continue to raise them, I ended up buying my lease. It’s 2019 Chevy Silverado trailboss. I still had another 7 months to go, and feel like the price was much higher than it should be. At the end of lease it was suppose to be a bit lower, but either way I did it and locked in a 3.39% interest rate for 5 years. Trucks are expensive and with the shortage I just wanted to keep it. Not sure if it was the right decision or not
I’d love a Silverado, unfortunately it wouldn’t be a great fit for UK roads, cool truck though 👍
This is what I've been doing to justify getting a new car on lease. But I've been comparing a 3yeat old plus adding the cost of tyres, warranty, brakes all round, other services, time detailing, finance costs etc. And deducting what the advertised PCP balloon payment is. Suddenly that 5grand a year lease cost doesn't sound too bad for a brand new £37000 car... Now just waiting for prices to fall back to my target price.
Plus I will have £14000 value in my current owned car sitting happily in the bank.
Downside is that my current Car which was 3 years old 3 years ago only cost £16500 when prices were good. Plus all the above extras totalling to around 21000 is now worth 14000 (now that prices are high) costing only 7000 over the 3 years for a 520d which makes the lease sound high. But I know that was luck and won't happen again.
Question though. When leasing, in terms of credit does the leasing company hold against you the full cost of a car on file (£37000) or just the cost of the lease (£15000) if you know what I mean.
Thanks for the videos and making me aware of leasing.
I'm not sure is the answer to your question Dean, you'd have the ask the finance company really.
I have PCP'd before and currently on a lease. With the PCP, the value of the car minus any deposit goes on your credit file, with a lease it is just the value of the lease. So your monthy figure multiplied by the number of months agreed to. Spot on.
@@farmergeddon7527 awesome thanks. Even more of a plus to leasing.
I think you need to keep your car for maybe 7 years and have very few reliability problems for it to be worth buying and not many people do or get that these days
I think it’s more like 9 years with zero repair issues. People often forget to factor in repairs, not, Road tax, tyres etc 👍
The value not dropping out the bottom of 2nd hand cars must decrease the cost of car leasing as there resale will be better
That's why we're still seeing good leasing prices despite new car cost and interests rates rising.
@@DefinitelyNotAGuru I dont feel the cist of leasesing vans is worth it I personally buy all my vans but i tend to buy a 5 year old van 100000 miles ish pre covid nice spec 5k the currently cost is more like 2.5x that atm and I feel the cost don't reflect that I.e why I buy vans not lease just my opinion I bought vans pre covid so it's changed so much
@@darrenquarterman2611 Yeah, I'm less familiar with the van side of things mate but depending on what you use your vans for I'd probably stick to what you're doing. A lot depends on your tax position and income etc of course.
@@DefinitelyNotAGuru yea still enjoy your videos and it does help people out keep it up dude
@@darrenquarterman2611 cheers mate
Can you not buy the lease after 3 years ? Or do you have to give the car back? Not talking about PCP.
Yes you can but you don’t k is the price until a couple of months before the end of the lease so it’s impossible to compare. In my book leasing is a great way to lease, if you’d rather buy you’re often better off with a bank loan.
@@DefinitelyNotAGuru yes thank you. Just became confused as you told me earlier you could buy the lease but now seen you did not mention you could buy the lease if you wanted to. Nice video thanks.
@@DefinitelyNotAGuru I've never had a lease with option to purchase ever? On pcp yes
@@Andy-zi1wj before the car goes back you can always request to purchase and they will always give you a number.
@@DefinitelyNotAGuru is it possible to continue or extend the lease at the end of the contract? Perhaps a new arrangement
Great content! However, this is only true if you are looking at the first 3-4 years of ownership - over a longer period you're hiding the true cost of leasing. If you want to keep your car say 5-9 years which is much more economical, you will have gone through 3 lease vehicles in that period - the PCP, buyout then run is suddenly FAR cheaper. Depreciation is at it's maximum in the first few years. So if you want the cheapest form of car ownership, as always you are still better off buying a 3+ year old car and driving the bloody thing until it's 10+ years old. You will save a shed load of money on motoring despite maintenance costs.
It should cost more
To have a new car rather than an old bone shouldn’t it? Most people will pay a ton in repairs and road tax during that time. You also have to factor in the bonus of getting to choose a brand new car every 3 years and having a set car payment rather than getting unexpected bills at any moment.
I’ll probably do another video in a few weeks on a longer ownership.
PCP is the salesman’s dream.
@@DefinitelyNotAGuru indeed agree. There is a significant cost to having a new car every 3 years though, especially that deposit and no resale value, no matter which way you look at it. It's hidden. If you want a new car regularly, leasing is still the best. If you want decent motoring and value for money, buying a car a few years old and keeping it for a long while is the way to go. Buy a Toyota/Honda, go on extra holidays with the family instead. Stick the money in investments. Whatever works. But leasing is not comparatively cheap motoring when you step back and given most people are in debt, we should think twice. Thanks for the content.
@@bodrulm1 if you’re buying your older car with cash then it’s a good option for some but if you’re buying on a PCP the financing the balloon (as most do) it’s a totally different kettle of fish that will probably see you paying much more for your old car over 10 years than most do for a new one. As I said, I’ll do a video on it soon.
Oh thought you were going to add the HP finance into it as it was on screen. Should leave you about £4k better off than the PCP. But still £500 worse than the lease.
Never been a fan of PCP. Either lease it or get a cheap rate car loan.
HP is the most pointless of all, bank loan is pretty much always a better option so I disregard HP and suggest anyone else does too.
@@DefinitelyNotAGuru I don't think you will currently get a bank loan for less than the 3.8% given in your example.
So securing the finance against the car seems better than a personal loan at this moment in time.
Plus the bank is far more likely to finance £23k on a car than on an unsecured personal loan. Obviously this will be different for each individual but fair rates seem to top out at £15k.
Now walking into a dealer and asking for HP finance (with the dealer getting their affiliate fee) is definitely not usually the best deal.
So I don't think HP should be dismissed so easily, as in your very example it's not a mile away from the leasing cost. If you end up doing more miles than you originally thought then the HP might work out cheaper after the lease mileage charges than the lease.
@@gavjlewis whatever floats your boat mate, HP has never floated mine. I like the flexibility of a lease, I’d never personally buy new.
What was the lease deal? 5k miles pa?
Yep.
What about vat
What about it? All this includes VAT.
Dave Ramsey should see this
Yeah, I disagree with him on this in quite a big way on face value at least. I'm assuming that it all works very differently in USA though.
Your figures make sense along as you don't go over the tiny 5000miles per year you sign up for...
Either deal would have a mileage limit (pcp or lease) and obviously you’d choose a mileage that suits your needs.
@@DefinitelyNotAGuru fair point buddy, I'd be really interested in these total costs including resale in basic English with viewable figures with a mileage of say 10k per year, even just one option as that would give me a comparison
@@geoffboyd2895 it’s really hard to do much more than I’ve done here Geoff as resale figure can only be a guess at the moment with used prices being so volatile.
Putting mileage up to 10k probably puts £15/£20 per month on monthly payments of both options 👍
@@DefinitelyNotAGuru fair play mate, really enjoy ur videos and it's a subject of interest to myself, just so many numbers to crunch and just want to make the right call, I'm leaning to lease big time, just don't want to go with a low milage and then get battered with charges for going over, last year ended up driving to Spain and back on the off chance and I like the fact car milage wasn't even a consideration at the time, first world problems I know!
@@geoffboyd2895 excess mileage charges are sometimes really low but they vary a lot with each deal. I’ve see. Then as low as 3p and as high as 40p. One of my own work cars went 11k over the agreed amount after 3 years and it cost us £600. It was actually about £100 cheaper than if we’d have leased it with a higher limit.
For what its worth, I believe that you are essentially just leasing with a pcp anyway and the "equity" is purely notional when you are on a cycle of 3 year replacement. The benefit of a lease being that the full value of the car plus the interest is not loaded onto your credit profile. The benefit of a pcp being easier / cheaper to get out of early in most cases. You could also save for the balloon payment in parallel to making the monthly payments to own the car.
Ok
Brilliant educational video thankyou
Thanks
WHAT IF YOU WANT DO 12000 MILES PER ANNUM INSTEAD OF 5000 DOESN'T THAT CHANGE THE COST SIGNIFICANTLY
Yes, it will change all the numbers significantly but the end result will be more or less the same.
Why not camper it to a hp deal
Payments would be wildly different, zero point in the exercise.