Surely the guy who is leasing with £20k in the bank still has to make monthly payments on his car.
that will be £20k in his bank rather than tied up in his car. The car will be worth the same 
That's a fair answer, but the fact remains that the individual making payments will still have spent similar levels to the individual who paid cash at the end of the example 3 year period,
but have had no real security over the vehicle. [/quote]
Thats exactly my point.. Why would you want security over a vehicle when you can have a cash lump sum in the bank??
I know which one I would rather have... but here are a few scenarios for you to consider..
If someone drives into the side of your car causing it serious damage but not enough for the insurance company to write it off?
Your GTI is stolen ragged to death and the found abandonded by the police?
in to it further.
You car engine blows, do you really want it back after the VW monkeys have been all over it?
Just to add that leasing also pays your car tax for the period of the lease.
I am again not saying one method is better that the other... just trying to explain the benefits to those that chose to dismiss the idea without looking into it futher.
