Confirmation on Lease vs Purchase costings

[brown.jamesa]

All as the title says, I am looking at getting a new car soon (GTI PP) and have looked at the cost savings between leasing vs purchasing the car outright.

As far as I can tell, purchasing will always be cheaper, unless I am missing something?

Here are my calculation based on a standard 5 door GTI Performance Pack with Nav (no options):

Lease

https://www.firstvehicleleasing.co.uk/car-leasing/volkswagen/golf/golf-hatchback/2.0-tsi-gti-5dr-dsg-%5Bperformance-pack*nav%5D

Initial payment:      £1,161.45 (3 x £387.15)
35 months:            £13,550.25 (35 x £387.15)
Admin Fee:            £198.00
Total over 3 years:  £14,909.70
Total per month:     £414.15 (£14,909.70 / 36)

Purchase

Carwow cash purchase quote:            £24,721.00
Depreciation over 3 years:                £12,360.50 (50%)
Sell car put money back in the bank:  £12,000 (est)
Total over 3 years:                          £12,721.00 (£24,721.00 – £12,000.00)
Total per month:                             £353.36 (£12,721.00 / 36)


Comparing the above figures that’s a saving of £2188.70 over 3 years or £60.78 per month.

Am I calculating this right or am I missing something?

Cheers
James

[TonyJ]

Cost of credit for the initial 24K ?

The lease option requires a very small amount of initial capital
The purchase option requires you to have the full amount upfront  (if you are going for a straight purchase)

[brown.jamesa]

Hi Tony,

I already have the money upfront, plus my current car which is worth ~£11k

So would either do:

a) part-ex + cash
b) cash

So would be paying myself back the cash I have saved over x years.

[breezasib]

Also depends what lease deal offers are available at the time. Couldn't resist a standard GTI on the following:

£2400 initial
23 x £95.99
24 months
5000 miles per anum
7.2p per mile excess

=4607.77 for two years in a new GTI 
Even going over the mileage limit should work out at less than two years depreciation.

[brown.jamesa]

Also depends what lease deal offers are available at the time. Couldn't resist a standard GTI on the following:

£2400 initial
23 x £95.99
24 months
5000 miles per anum
7.2p per mile excess

=4607.77 for two years in a new GTI 
Even going over the mileage limit should work out at less than two years depreciation.

Its very close....

lets say you do an average of 10k per year, so your lease would have cost the following after 2 years:

£2400 initial
23 x £95.99
24 months
5000 miles per anum
additional 5000 miles per year @7.2p (£720)

£5327.77 over 2 years
£221.99 per month

Based on getting 25% off old list prices and with 30% depreciation, it still would work out cheaper:

£27,495.00   GTI Standard List
£6,873.75   25% off list

£21,996.00  Cash purchase price
£15398.20   Values after two years (-30%)

£5224.05    Cost over 2 years
£217.66     Cost per month


There is just no way a lease deal is going to be cheaper that buying the car with cash, unless you are lucky to grab a limited deal which is a lose leader to encourage other people to join at a higher price, which looks like you have :-)

 

[fredgroves]

The trick seems to be:

1) beat the price down as low as possible (drive the deal)
2) take a PCP deal out to get VW finance contribution (usually runs at about £2k)
3) withdraw (not cancel) the finance in the first day of delivery, pay off the outstanding amount - keeping the deposit contribution

That should probably take a £30k car down by about £7k at least. Which almost certainly will make it cheaper than leasing, although you do need to allow for road tax, which leasing includes always.

[brown.jamesa]

The trick seems to be:

1) beat the price down as low as possible (drive the deal)
2) take a PCP deal out to get VW finance contribution (usually runs at about £2k)
3) withdraw (not cancel) the finance in the first day of delivery, pay off the outstanding amount - keeping the deposit contribution

That should probably take a £30k car down by about £7k at least. Which almost certainly will make it cheaper than leasing, although you do need to allow for road tax, which leasing includes always.

Love the idea of the "VW finance contribution", any issues or penalties of paying that off straight away?

[fredgroves]

You have to be careful with the words you use to bail from the PCP, but its definitely something loads of people do on here. Someone can give you the exact details I am sure.

(I learnt the trick from here... in fact i learnt a lot of stuff from here )

Not sure if the deposit contribution is running at the moment, but they come and go, sometimes different values but its a gift horse!

[Hertsman]

Apologies for hi jacking this thread (seems the best one to) for selfish purposes but know some really informed folk are on the MK 7 forum and need their general advice without starting new thread.

Landmark date coming up for Wife in October and I want to lease a Mini Cooper Chili Pack Auto for her as a surprise and could go to local dealer and just pay the price

expected mileage would be low, 5k at most, so it has me looking at lease but PCP also if the deal better?

So what seeking is best option on value to achieve a Mini Cooper Chili Pack Auto for October (so when best time to start process)

All advice greatly appreciated

[brown.jamesa]

Apologies for hi jacking this thread (seems the best one to) for selfish purposes but know some really informed folk are on the MK 7 forum and need their general advice without starting new thread.

Landmark date coming up for Wife in October and I want to lease a Mini Cooper Chili Pack Auto for her as a surprise and could go to local dealer and just pay the price

expected mileage would be low, 5k at most, so it has me looking at lease but PCP also if the deal better?

So what seeking is best option on value to achieve a Mini Cooper Chili Pack Auto for October (so when best time to start process)

All advice greatly appreciated

It would probably best to ask the guys over on the mini forums:

http://www.mini2.com/forum/