Is Leasing CHEAPER Than Buying? 2023 Data REVEALED!

Is Leasing CHEAPER Than Buying? 2023 Data REVEALED!

 here’s a question for you is leasing a car a bad idea well if you listen to Conventional uninformed logic then it’s not necessarily the most financially responsible thing to do people say that leasing which is basically renting a car over an extended period of time is only for people who want to throw their money away or show off in cars they can’t actually afford but it’s so much fun if that’s your point of view I hear you but I’m not so sure I agree at least not always because leasing if you do it right can actually be the cheapest way of using a new car let me break it down first of all I’ve got to tell you that I’m not giving you Financial advice go talk to your mum your dad or your accountant for that but I am about to explain some data that I have thanks to AutoTrader and we know pretty much everything when it comes to car data right we give you the tools to buy sell and Lease cars so we know what one costs compared to the other and I really want to share those numbers with you so you can make the right decision for yourself okay so what is leasing it’s long-term renting basically and it usually 

applies only to new cars you pay an initial rental which is a bit like a deposit except you don’t get it back and then you pay a monthly rental fee over 24 36 or 48 months in return you get a sparkling new car that you can use up to 20 000 miles a year and at the end of the lease period they’ll come and take the car away at which point you can choose to order a new one or not on the surface it seems as if you’re just throwing away a bunch of cash though imagine leasing an Audi A3 and paying nearly 500 pounds a month for 36 months that’s 18 Grand to use a car that at the end of those three years you give back what but things aren’t always as simple as they seem here’s the thing buying a car with cash is all well and good maybe you buy a car for 18 000 pounds and you keep it for the rest of your life or rather for the rest of its life a conventional car will last for 200 000 miles if you maintain it well maybe even 300 000 miles in the UK the average distance we travel every year is about seven and a half thousand miles if you stuck it out to The Bitter End doing that number of miles you could keep a car for 

like 40 years but let’s keep it real people don’t keep their cars for 40 years if they did everybody would be rolling around in cars that were made in 1983 and I’m sure you don’t drive a car made in 1983 at least not on a daily basis out of the nearly half a million cars for sale on auto trader there were only around 500 that were made between 1960 and 1980. people don’t keep their cars for very long in reality according to our data on average cars on AutoTrader are bought and then sold every three years and four months and what happens when that period is over and you want to get rid of the car you sell it right but if you spent let’s say 30 grand on a car when it was new and then sell it after three years and four months you don’t get back that 30 grand do you no and that’s because there’s a thing called depreciation which is a reduction in the value of a car over time due to wear and tear as soon as you buy a new car it becomes an old car and nobody wants to buy an old car for the price of a new car after three years and four months that car might have lost up to 50 of its value a 30 car might be worth 

fifteen thousand pounds which means over three and a bit years you’ve lost fifteen thousand pounds for the privilege of using that car over three years that’s 416 pounds a month so the question I have is would it have just been better to lease a car for 416 pounds a month rather than spending thirty thousand pounds on it up front let’s break it down with some concrete examples as I’ve said Auto Trader allows you to buy new cars used cars and also to lease we give you the options and all we care about is that you do what’s best for you but what’s great is that we have the data we can tell you whether leasing or buying might be best for a specific car on our platform there’s a few things to consider when you’re trying to work out whether leasing is better than buying cash first of all the total price of the car to buy the depreciation that’s how much it loses over time and the future trade valuation that’s roughly how much you can sell that depreciated car for when you’re done with it and here’s how much you need to consider before you go into a lease the initial payment that’s how much you pay up front the 

monthly rentals that’s how much you pay every month for the duration of the lease and the total cost of the lease that’s everything added together what I’m going to do now is compare buying versus leasing for a few specific cars keeping in mind everything I’ve just mentioned and we’re going to do it for the default lease period of 36 months with six months initial payment and 8 000 miles a year allowance which is what most people do let’s start with one of the most popular cars in the UK the Nissan Qashqai specifically the 1.3 drgt mhev X Center premium great car now the list price for this car is 29 419 pounds that’s how much it cost to buy right we’ve also calculated the future trade value of this car which is remember how much you can reasonably expect to sell it on for privately after three years that’s 15 205 pounds the total cash cost that’s the difference between what you paid for it when it was new and what you can sell it for after 36 months is 14 214 pounds that’s what you’ve lost by buying that car new and selling it after 36 months and by the way the longer you keep it the more the car 

loses in value how does that compare to leasing over 36 months okay we’ll use the most common lease terms for a cash guy on our site that’s 343 pounds a month you pay six months worth of that up front and then 35 subsequent monthly payments of the same amount over the entire lease period and for this cash guy the total cost of the lease when you add up the initial payment and the rest of the monthly payments is 14 081 pounds interesting isn’t it if you bought the cash guy you’d have lost 14 214 after three years but as we’ve just seen if you leased the car and then gave it back after three years you’d have paid a total of 14 081 pounds that makes the lease over the same three year period 132 pounds cheaper than buying being the cash guy and you don’t have to save up or put aside 29 and a half thousand pounds in cash in the process you just keep your money and pay in installments we’ll look at a couple more examples in a second but I just want to reiterate I’m not giving anyone Financial advice please don’t take this as gospel all right speak to someone who knows about money I’m just 

Is Leasing CHEAPER Than Buying? 2023 Data REVEALED!

giving you my side of the story do the Maths for yourself I should also point out that this video is not aimed at people who prefer to buy used cars I’m here I am talking exclusively to people who want to work out the best way of getting into a new car right with that said let’s work on another example let’s do the pole star two first of all here’s the list price the price of buying it new forty five thousand four hundred and fifty pounds the future trade value again the price that you could reasonably expect to sell it for after three years of depreciation 21 823 pounds and that gives you a total cost the difference between the new list price and the price you sell it for of 23 627 pounds that’s how much you lose what if you were to lease the car okay the monthly price of a pole star 2 lease on auto trader is 566 pounds and 98 Pence on the terms that I mentioned earlier if you pay six months initial rental on month one and that same figure every month for the rest of the lease period Then the total cost of the lease is 23 246 pounds and 18 Pence if you bought this car new and then sold it again after three years you’d lose 23 627 pounds the cost to lease the car twenty three thousand two hundred and forty six pounds in other words by leasing the pole star 2 You’re Gonna Save 380 pounds and at no point will you have to Fork out 45 000 pounds before someone gives you the keys all right it’s fair to say you’re not going to be better 

off leasing every single car versus buying it some cars depreciate more than others during the time that you own it hell some cars even go up in value it’s very rare but it does happen let me give you an example of the car with good depreciation the Porsche 911 this one cost 105 699 pounds after three years if you sell it you get back 66 780 pounds that’s a loss of 38 000 pounds but if you lease one with us you pay an initial payment of 11 291 followed by 1881 every month for a total lease cost of 77 Grand the difference between buying it and then selling it on total cost thirty eight thousand nine hundred and nineteen pounds versus leasing total cost 77 000 pounds is over 38 Grand you’re better off buying the Porsche anyway let’s end on a great example of a car where if you don’t lease it you’re literally setting fire to your money again not Financial advice just giving you my opinion the Audi A8 3 liter TDI V6 50 black edition this one costs 82 000 pounds right after three years of driving it because of depreciation you can sell it 

back for thirty four thousand pounds so in three years you’ve lost 47 700 pounds if you lease it you pay 876 pounds a month with a total lease cost of thirty five thousand nine hundred and twenty three pounds the difference between buying and leasing is nearly 12 000 pounds over three years in the favor of Leasing food for thought personally what do I do I buy some cars I lease others it just depends on the individual deal I bought my Ford Mustang cash at least my BMW X5 and I leased my Tesla Model y I’m not telling you what to do with those specific cars I’m telling you what I did with them right and that you can also save money with leasing if you get the deal right and there are pros and cons obviously Pros include the fact that you can get a new car every few years and you might not have to worry about maintenance you also have a car that’s in warranty all the time you get to try out lots of different cars rather than sticking with one for the rest of Eternity and you don’t have to worry about depreciation but there are 

downsides as well the mileage you can do is limited you can’t modify the lease car and you get charged for damage when you give it back on balanced I wouldn’t say leasing is definitively better but it can save you hundreds thousands even tens of thousands it’s definitely worth thinking about and on that subject if you’re interested in leasing a car head over to UK for the latest deals I’ve also put a link down below to my top 10 lease deals in the description box the ones that I would personally lease instead of buying but of course whether you’re 

buying selling or leasing Auto Trader can help you do it all we’ll even give you an instant cash offer for your used car so you can put it towards the cost of a new one I should also point out that the very best way to get hold of a brand new car if you’re really lucky is to win one for free in our monthly electric car giveaway we give away a brand new electric car every single month because we’re nice I guess check the link down below for more details okay guys I hope that was helpful I hope it was insightful let me know in the comments if you found it useful and if you found it interesting please do hit the like button and subscribe I’ll see you again soon

Leave a Reply

Your email address will not be published. Required fields are marked *