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Newbie seriously considering leasing UK - sense check

gangzoom

Active Member
May 22, 2014
1,562
1,435
Uk
Our X is now 5 years old. We paid £71k for it in 2017, if I put it on Autotrader for £50k it'll be the cheapest 6 seater X without crazy miles by a good margin.

The cost of depreciation works out ar roughly £330/month. This is partly because a brand new X (even if you could order one) is heading towards £100k in base spec, and with inflation projected for 7% this year prices are only going to go one way.

We are keeping our X longterm (8years at least - which is only 3 years away!!). Right it costs us pretty much nothing to own and keep on the road.

It's the same with our 7 year old Lexus IS300H. Paid £31k for it in 2015, currently worth £17k, the depreciation works out at just £170/month. My wife would love to replace it with a S/3, but financially its not even close to been viable, so the Lexus is staying potentially for another 7 years easily.

If you MUST have a new car every 2-3 years leasing seems to make sense, but does any one really NEED a new car every few years? Keeping a car longterm works out far cheaper most of the time.

However for full disclosure we are about to spend 40% the purchase price of our house on a new double height kitchen......I know for a FACT no one needs a double height kitchen, so we all find our own ways to justify wasting money :).
 
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Wattsisname

MY Red/White/Gems EDD over the rainbow somewhere
Jan 12, 2022
1,158
576
Wandsworth London
Our X is now 5 years old. We paid £71k for it in 2017, if I put it on Autotrader for £50k it'll be the cheapest 6 seater X without crazy miles by a good margin.

The cost of depreciation works out ar roughly £330/month. This is partly because a brand new X (even if you could order one) is heading towards £100k in base spec, and with inflation projected for 7% this year prices are only going to go one way.

We are keeping our X longterm (8years at least - which is only 3 years away!!). Right it costs us pretty much nothing to own and keep on the road.

It's the same with our 7 year old Lexus IS300H. Paid £31k for it in 2015, currently worth £17k, the depreciation works out at just £170/month. My wife would love to replace it with a S/3, but financially its not even close to been viable, so the Lexus is staying potentially for another 7 years easily.

If you MUST have a new car every 2-3 years leasing seems to make sense, but does any one really NEED a new car every few years? Keeping a car longterm works out far cheaper most of the time.

However for full disclosure we are about to spend 40% the purchase price of our house on a new double height kitchen......I know for a FACT no one needs a double height kitchen, so we all find our own ways to justify wasting money :).
Excellent account (no pun intended). Our last few cars were cash purchases which we kept for 8 years plus. I can't say I enjoy the sell and buy process. Well, the purchase part is OK I guess. I now quite like the idea of giving it back after 3 years. Elon and Tesla have really "disrupted" the car industry and I believe there will be viable competitors in three years. So, as I am well in to bucket list country, a change at 3 years, if I am extant, could be fun.

Having got my leasing quotes in, I notice there are threads referring to PCP which is new to me and so I will check them out.

Now to the really important issue; your double height kitchen! A veritable atrium in your home or maybe more of a duplex. Are you building a double height extension and skipping the first floor? Or are you stealing an upper room. Whatever, it sound superb. We once had a Duplex apartment which we loved. Good luck with your builders.
 

gangzoom

Active Member
May 22, 2014
1,562
1,435
Uk
Now to the really important issue; your double height kitchen! A veritable atrium in your home or maybe more of a duplex. Are you building a double height extension and skipping the first floor? Or are you stealing an upper room..

Both of those options are far cheaper and sensible way for a double height kitchen....instead we have gone a totally new steel superstructure with no need for weight baring wall in the middle, which will enable a double height entrance hall with a 'floating' central corridor connecting the front and back aspects of the house.

It's essentially total utter madness financially, and adds ZERO living space to the house!!! But what's life for if not treading the line between insanity and madness :).

49922081248_315d2e0511_c_d.jpg
 
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Both of those options are far cheaper and sensible way for a double height kitchen....instead we have gone a totally new steel superstructure with no need for weight baring wall in the middle, which will enable a double height entrance hall with a 'floating' central corridor connecting the front and back aspects of the house.

It's essentially total utter madness financially, and adds ZERO living space to the house!!! But what's life for if not treading the line between insanity and madness :).

49922081248_315d2e0511_c_d.jpg
I just came here to give some friendly advice related to pcp/ lease on teslas and now here i am considering ripping down an extension we’ve just paid for to build this ha!….looks great
 

Wattsisname

MY Red/White/Gems EDD over the rainbow somewhere
Jan 12, 2022
1,158
576
Wandsworth London
Both of those options are far cheaper and sensible way for a double height kitchen....instead we have gone a totally new steel superstructure with no need for weight baring wall in the middle, which will enable a double height entrance hall with a 'floating' central corridor connecting the front and back aspects of the house.

It's essentially total utter madness financially, and adds ZERO living space to the house!!! But what's life for if not treading the line between insanity and madness :).

49922081248_315d2e0511_c_d.jpg
That's the line to walk because she's yours! Paraphrasing the late Jonny Cash. Well done. Beats the hell of a Fulsom prison.
 

gangzoom

Active Member
May 22, 2014
1,562
1,435
Uk
I just came here to give some friendly advice related to pcp/ lease on teslas and now here i am considering ripping down an extension we’ve just paid for to build this ha!….looks great

Haha you wouldn’t be so keen if I showed you the quote for the steel quotes!!!

I blame our architect, if we were going for a standard extension I suspect we might have just 'canceled' the whole idea and ordered a P Model S or Y instead instead, given the faff with rising construction costs and lead times at present.

But because the design looks so intriguing on paper, every day I go into the kitchen now and look up wondering what it would feel like with an extended roof that connects the entrance hall.......For all the questions/queries on car finance/purchases the sums of money involved really is tiny compared to houses.

We haven't even laid down a single brick, and I recon the 'build' cost is already approaching £15k in architect, structural, planning, building reg fees already!!
 

Wattsisname

MY Red/White/Gems EDD over the rainbow somewhere
Jan 12, 2022
1,158
576
Wandsworth London
Haha you wouldn’t be so keen if I showed you the quote for the steel quotes!!!

I blame our architect, if we were going for a standard extension I suspect we might have just 'canceled' the whole idea and ordered a P Model S or Y instead instead, given the faff with rising construction costs and lead times at present.

But because the design looks so intriguing on paper, every day I go into the kitchen now and look up wondering what it would feel like with an extended roof that connects the entrance hall.......For all the questions/queries on car finance/purchases the sums of money involved really is tiny compared to houses.

We haven't even laid down a single brick, and I recon the 'build' cost is already approaching £15k in architect, structural, planning, building reg fees already!!
Are you moving out during construction?
Ah, let me rephrase that : you must move out during construction; pack the Tes and head for the Gorge de Verdon. Wonderful in Springtime or any time really.
 

WannabeOwner

Well-Known Member
Nov 2, 2015
6,895
3,644
Suffolk, UK
Are you moving out during construction?

I wish we had done that. We built a passive house extension (gave up trying to improve the original property to Passive House / EnerPHit levels "too difficult"), Whilst building the extension it was completely isolated from the original house - so we still had a kitchen etc. and assumed that would be "fine"

There were two snags ...

There was still plenty of dust and inconvenience in the original / main house.

But far worse was that the shiny new extension made the old part look ... worn out. So we then remodelled the whole of that. For THAT we definitely should have moved out. Improved insulation, replaced all the "mean" cornice with nice plaster moulding (by the by that was without doubt the best thing we did, in the grander scheme of things not expensive, and has dramatically improved the "balance" of the rooms). But in our case the house was built 1960 and "mean cornice" was in vogue. Rewired everything, put CAT5 in every room and a plumed in whole-house Hoover (not actually made by hoover of course ...). We liked the MVHR air quality in the new extension so much we retrofitted that to the old part (revolutionised it; no longer any condensation on windows in Winter, and it will have completely removed any possible fugus spores in winter), and Home Automation too.

None of that was in the original budget, so beware of side-effects of extension! However, on the plus side of the balance sheet the foot print is now 1.5x bigger, and despite that the winter fuel usage is 50%

Our kitchen, in the extension, is 1.5x height. We (thought we) wanted glass in the roof to be sure to have maximum light; architect said that the windows South and North would let in plenty of light [he was right] and the Passive House guy showed us the figures for the catastrophic difference that roof-glass would make to over-heating in Summer and cold air falling and creating draughts in winter. I'm really glad we didn't do that. About the same time we had friends who built an eco house. They have roof glass (proper triple glazed and fancy glass) in their vaulted ceiling kitchen. It is absolutely unbearable in there in Summer ... and you can feel the falling cold air in winter.
 

WannabeOwner

Well-Known Member
Nov 2, 2015
6,895
3,644
Suffolk, UK
7 years ago now. The hassle long since forgotten ...

... neither of us has had a single winter Cough / Cold since, despite being surrounded in the office by people spluttering all winter - known benefit of Passive House, but not something I had expected.

All new housing should be to that standard, I wish government would just JFDI on that point. Level playing field for all builders.
 
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DJP31

Active Member
Aug 30, 2015
1,744
1,164
UK
You always can trade in Tesla Financed one same as PCP.
You can, but the crucial difference is at the end of the PCP if the car is worth less than anticipated you walk away and the finance company takes the hit. With a traditional loan you always have to keep an eye on the settlement figure and hope the car is worth more overwise trading in/up requires you to find extra cash.

PCP gives a layer of protection against values dropping and can be very useful. It costs a bit more than a standard loan, that's the "insurance premium" for the ability to walk away.


Certainly more interest to pay on the PCP because they limit down payment.
However, having the option at end suits me.

If you want to make a bigger than 30% deposit then just make a partial repayment once it's set up and that will reduce the overall interest charge.

I agree about having the option at the end, particulary as I change every three or four years. That said, this time I leased for the first time. It was £10k cheaper over the 4 year term than PCP and I didn't think the car would achieve that much over the balloon.
 
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You can, but the crucial difference is at the end of the PCP if the car is worth less than anticipated you walk away and the finance company takes the hit. With a traditional loan you always have to keep an eye on the settlement figure and hope the car is worth more overwise trading in/up requires you to find extra cash.

PCP gives a layer of protection against values dropping and can be very useful. It costs a bit more than a standard loan, that's the "insurance premium" for the ability to walk away.




If you want to make a bigger than 30% deposit then just make a partial repayment once it's set up and that will reduce the overall interest charge.

I agree about having the option at the end, particulary as I change every three or four years. That said, this time I leased for the first time. It was £10k cheaper over the 4 year term than PCP and I didn't think the car would achieve that much over the balloon.
Since max time for the loan is 6 years, you expect to pay off at least half of the car value after 3 years.

With let's say 4000 deposit, your LR (cash on the road 57k) monthly payment on PCP is 1034 (3 year 15000 miles pcp deal) and you optional payment is 22k

Tesla Loan is 53k at the same deposit and same car. Monthly payment is 837 (72 months or 6 years) and after 3 years your remaining credit will be 26k

7200 of payments in 3 years difference, so in 3 years you are like 4000 worse in PCP :/

Lease imho is worst. You pay shitloads and in the end have absolutely nothing:/
 

DJP31

Active Member
Aug 30, 2015
1,744
1,164
UK
Since max time for the loan is 6 years, you expect to pay off at least half of the car value after 3 years.
It doesn't work like that I'm afraid. The interest on the loan is front end loaded, so you aren't eating into the capital at anything like that rate. This is also at the same time that the car is taking the biggest depreciation hit, and put the two together can result in a nasty negative equity situation (granted not at the moment!).

Lease imho is worst. You pay shitloads and in the end have absolutely nothing:/
Sure, and depends on what you want out of the situation. If you want to buy and keep a car then a 3.99% loan from Tesla is a sound route to go down. If you don't want to own a car and are happy to rent one covering the cost of the depeciation (whether that's by lease or PCP and handing back) and jumping into a new car every few years you look at the total cost of "ownership" over the period and go with the cheapest option.

It's horses for courses and each have their pros and cons.
 

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