If you sell your PCP car pre the end of term then you’re lucky if you get any equity at all too. I only had equity on my previous one due to the chip shortage. With a lease car you essentially have that “equity” in lower payment for the duration of the lease as long as you save the difference. I have been told by an aquaitance in the trade once you get past the 1/2 way mark in a lease most lease companies are happy to get the car back (in good condition) & not pursue the outstanding contract as it costs more in legal fees & time than they’d gain back (not sure about that lol). Essentially though your “equity” is just elsewhere ie in your bank not a finance companies.Very true.
My prediction is the current second hand bubble will burst at some point.
My thinking:
9k+ Teslas we’re delivered in December 2021 alone; in 3 years time (my expected holding period) there will be a lot of stock kicking about and most probably the chip shortage will also be improved.
The impending (ie next 6-12months) 4000 series battery improvements may represent a watershed moment for the 2nd stock and prices.
Also I weight up the opportunity cost of missing out on possible future equity vs the comfort of known lower contracted figures.
Plus if the current lease market stays the same, i ‘only‘ need to find the 3month upfront for the next lease.
Perhaps my logic is slightly perverse, but my past experience with PCPs have shown only end equity of around the £2k level.
It all depends how you play it, if you’re think lease as a cheaper option no it’s not really, if you put the difference aside. PCP & lease are essentially the same thing in costs (if you save the difference), just that financially on a lease you have less outgoings as far as lenders like mortgage companies etc are concerned.