New Car Needed: To Buy or Lease?

Kate54

Just an add on - watch out for gap insurance pressure selling. Not needed at all in year one and debatable for the next two.

But can still matter in Year 1 if:
Insurer only pays market value, not new replacement
Large initial rental paid (3, 6, 9, 12 months upfront)
Expensive EV / premium car with sharp depreciation
Lease settlement exceeds insurer payout

Later Years (Years 2–4) Usually more relevant because:
Car value drops
Lease obligations remain fixed by contract
Theft/write-off risk continues
Market value may lag settlement figure
This is commonly where GAP has more practical value.

Just an add on - watch out for gap insurance pressure selling. Not needed at all in year one and debatable for the next two.

We moved to a PCH hire Audi this year after driving a 20 year old Volvo with an accumulation of minor faults. The first time we've ever had a new car. At our age and lowish annual mileage it made sense. They pay the road tax and we pay comprehensive insurance plus GAP insurance ( in case of an early hand back or write off). We sold the Volvo to WBAC: very convenient. Made sense for us. May not make sense for you.

Ashcombe, glad you've got sorted with an automatic Puma, we had one and liked it, hope you do too 😀.

Brilliant!

We’ve always gone for a 2nd hand, 1-2 years old, not too many miles on the clock. A brand new car loses £££ as soon as you drive it off the forecourt.
My current car is a Jazz, was 2 years old, one careful lady owner, only 5k miles on the clock.

Many thanks for your input, everyone. I've put a deposit on a three year old petrol powered Puma Vignale automatic with low mileage. It's on a PCP with an annual maximum mileage of 6,000 miles. The longest journeys I undertake are to France and back, a round trip of about 460 miles, no more than four times a year. Other than that I only drive within Devon and mostly within Torbay as we go by rail to visit my family in Cheshire/Staffs.

I hope to take possession of my "new" car within 10 days or so; it's currently in Plymouth - the Bank Holiday weekend has slowed things down somewhat!

And, we have this current car over 4 years, not 3.

We have had cars on PCPs for about the last 20 years.

You can set your own annual mileage (with in certain limits) and the monthly cost of the PCP reflects that. As Georgesgran says - if you go over there is an excess mileage charge (which is quite high) That is the only contraindication we can see and we have always been at about the right level and not had to pay extra.

The pros are obvious.

I see from the Morning thread you’re thinking of a Puma - I went to the local Ford dealer and think they said they were only offering electric cars now. And Fiestas not at all! I ended up at Suzuki, one of the few makers not concentrating on electric.

If you plan to keep your new car for a while, if you don’t want to use savings it’s still better value to get a bank loan than to lease. A low mileage second hand car has already depreciated in value, and therefore in cost, so I would look at those before committing to a lease on a brand new car which will never be your own. Ex mobility cars often have very low mileage, you can pick up a 3 year old car with less than 5k miles on the clock for much less than you would pay for a new one.

Would your age make a difference to charges....i.e if you are over 80, would they even want to consider you?

When I had to change my car a couple of years ago, several people recommended leasing/pcp, but as I’m on my own (couldn’t share DH’s car) I found the mileage allowances too low and the excess mileage very high.
However, if you don’t go far, I think it’s the way to go.

Thank you very much for all your helpful advice which is really useful. 👍

Exactly as Kate54 states, a PCP. Sorry, it’s late and I should be in bed!

Over 5 years ago I leased a car and it was fantastic. No need to worry about anything other than replacing tyres if needed and fuelling the car. Fast forward 4 years and I went back to the showroom and spoke to the salesman. Ever helpful, we discussed the ins and outs of leasing again. Then he pointed out that if for any reason I had to hand the car back (I am now nearer 80 than 75), I would have to repay 95% of the outstanding lease. So instead I took out a pfa (?) with all the same advantages as leasing, free service, free RAC membership etc, but have to pay the road tax. Then after 4 years I sell the car back to them. So I would suggest that if you are interested in leasing you find out how much of the lease you have to pay back in the event you are no longer able to drive.

I have never leased a car but to me, it sounds a splendid idea especially as we are getting older and one never knows when one must surrender their licence, I had to last July, because my sight had deteriorated. I received peanuts for my Skoda.

Even second hand cars are very pricey now. I would go for it and you will still have your savings.

Most popular seems to be PCP - Personal Contract Purchase - which if you can afford it is a worry-free way of motoring. Sometimes a deposit is needed. After three years - or even less when dealers are keen to meet sales targets - the car is returned and you drive home a new one. Road tax paid for first year, five days free insurance - but of course it’s never yours. I treat it as a reasonable indulgence which removes a lot of anxiety. Have a chat with a dealer ( top tip: don’t care about colour!)

We took the decision three years ago to lease and haven't looked back. We always bought our cars outright and got fed up of using big chunks of savings to do this. So we went with leaving the savings in tact and looked around at who offers the best lease deals. So far we've had two different cars on very good monthly payment terms and I can't see us going back to buying outright now.

Good clear explanation thesunrisesintheeast I have wondered how it works. Do you have to tie yourself into a fixed number of years?
ashcombe same thing happened to us. Very annoying as the car was great just what we needed, had it for decades.

My husband swears by leasing. When we used to buy, it was always a prestigious car and relatively new, costing us a couple of hundred pounds a month in repayments. It's said that the minute you drive the car off the forecourt it depreciates and by the time you've paid it off, the car is older and not worth much when you go to part exchange it for something else.

Whereas with leasing, you get a brand new car, pay monthly as you would if you bought it on finance, and after three years you change it for another new car and just continue the payments as you would with buying on finance, but in that case it wouldn't be brand new. The lease company take care of mechanical problems and the car doesn't need MOTing because it's new.

We own our home, but that appreciates with age, whereas a car doesn't.

It's not for everyone, but suits us.