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Lease/Contract Hire vs Purchase options

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pdk42

Active Member
Jul 17, 2019
1,723
1,901
Leamington
I'm planning to finance my M3 via a straight loan (maybe using the Black Horse deal). However, a number of people have offered the opinion that there might be rapid change in the EV market soon which could have a big impact on depreciation - so it may be a better option to go with contract hire/lease. In other words, to leave the risk on the finance provider. I've never financed a car that way before. What are people's thoughts?
 
What rapid change?

The model 3 has good range and performance even if batteries last longer in a few years it’s still a useful car. The competition is years behind so I don’t see that as too much of a threat.

I’ve gone loan over lease as I imagine I’ll trade it in at some point. I don’t want to lease and just lose all that money.
 
What rapid change?

The model 3 has good range and performance even if batteries last longer in a few years it’s still a useful car. The competition is years behind so I don’t see that as too much of a threat.

I’ve gone loan over lease as I imagine I’ll trade it in at some point. I don’t want to lease and just lose all that money.

You don't necessarily "lose all that money" If the cost of the lease over the period is the same orless than the depreciation you will be better off than trading in a car bought on HP.

OP if you are worried about future developments (the are happening fast in the EV world) then lease or PCP is the way to go.
 
I was originally going to go PCP, but it requires a bigger deposit and with uncertainty around the depreciation it isn’t guaranteed that the car will be worth the lump sum amount + deposit amount in 3 or 4 years. I am therefore currently changing to a lease deal. Lower deposit required and no worries about future value. The £320 tax is also included for years 2+.
 
My opinion, so take what you will, is that the tech is going to advance so quickly now with EV cars I’m not going to go through the process of buying a car, just lease it for 2-3 years. I’m due for delivery after the 15th for a 3 year lease. By the time the 3 years are up, the SR+ we are getting should have some nifty updates both via software and hardware so I can either get a new model or go to another car maker.
 
I went for a lease this time as I'd never intended to own any of the cars I'd previously PCP'd, I'd just never thought about it! So I'd basically leased for more money anyway (never had any equity at trade in etc..)
 
I went lease for the same reasons as above.
I always have owned my cars before.
When I looked at the upfront cost + monthly cost less the road tax and fuel savings comparing electric vs diesel I got to a number that was comparable to the depreciation on my existing car. I just took the price I paid for my car less what I can get for it today and divided by the number of months of ownership.
I get a newer car that is smaller than my existing but get some benefits - all a trade off /compromise. I did not factor in the costs of service etc. In 3 years time I get to review the car market but in truth I don't think I will every 'buy' a car again. By the time I retire I hope that the transport world has changed significantly enough for me to not require a car.
I would not buy a Model 3 either- I think that the way that personal transport will evolve I am happy for someone else to take the depreciation on the car market. July Diesel sales are down 225 YoY while sales of BEV are up 158%
Car Registrations
 
I've always bought my cars also. So have no experience with PCP, lease etc.
We bought our car 4 years ago in the hope we'll run it till EV becomes viable.
We want the Model Y, but our cars a bit of a bum. Lots of electricle failures. It wont last another 2 years without costing us ££ now we're out of warranty...
So we're getting a Model 3 till the Y is available.
I originally went for BH PCP over 3 years with our deposite + trade in as deposite in the expectation we'd switch to a Y at the end. So:
The cars a SR+ White with unicorn.
10k down and 319.46 per month
= 21,500.56
Now I understand the car 'could' be worth apx 25k. Giving us a possible 3.5k equity.
BUT
I've a lease quote for:
422.60 x 35
3k down
+ 199 processing
= £17,990 over 3 years.

Am I missing something? Why would I choose PCP over lease if I'm changing after 3 years? I'm guaranteed 3.5k better off. And I'm doubtful Tesla would give the full 'book value' of my 3 on any new deal?

The option to keep the 3 if the Y's not available is a positive though.
 
I've always bought my cars also. So have no experience with PCP, lease etc.
We bought our car 4 years ago in the hope we'll run it till EV becomes viable.
We want the Model Y, but our cars a bit of a bum. Lots of electricle failures. It wont last another 2 years without costing us ££ now we're out of warranty...
So we're getting a Model 3 till the Y is available.
I originally went for BH PCP over 3 years with our deposite + trade in as deposite in the expectation we'd switch to a Y at the end. So:
The cars a SR+ White with unicorn.
10k down and 319.46 per month
= 21,500.56
Now I understand the car 'could' be worth apx 25k. Giving us a possible 3.5k equity.
BUT
I've a lease quote for:
422.60 x 35
3k down
+ 199 processing
= £17,990 over 3 years.

Am I missing something? Why would I choose PCP over lease if I'm changing after 3 years? I'm guaranteed 3.5k better off. And I'm doubtful Tesla would give the full 'book value' of my 3 on any new deal?

The option to keep the 3 if the Y's not available is a positive though.

Golden rule, from what others have told me: if you want to change your car every 2-3 years then lease. If you want to have the car for longer with the chance to buy it, PCP.
 
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