Leasing a Used Car in the UK

[@DefinitelyNotAGuru]

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[@davidvondadelszen6063]

Great book!

[@DefinitelyNotAGuru]

@@davidvondadelszen6063 thanks 🙏

[@SB-hr5yr]

In my experience, buying a used vehicle from a reputable manufacturer can be a great choice, especially if you opt for models known for their reliability. Brands like Lexus, Toyota, and Honda are famous for their long-lasting vehicles when properly maintained. While leasing a brand new car does offer some peace of mind, seeing £500, £600, or even £700+ per month going out of your account just for that peace of mind isn’t worth it in my opinion. For example, I bought a 10-year-old Honda Civic with one owner and a full Honda service history. It was in excellent condition, garaged, and had good quality tyres. In 15 years, it has never broken down and has only had one issue-a broken coil spring. Apart from regular service items like brake discs, pads, oil changes, and filters, it’s been incredibly reliable. The car has only depreciated by £2,000 in the four years I’ve owned it, which equates to around £40 per month. Including all maintenance costs (approximately £500 over four years), the total cost of ownership has been about £2,500, or roughly £50 per month. In contrast, leasing a new car for three to four years can cost anywhere from £10,000 to £25,000. Here’s a comparison of the pros and cons: Leasing a New Car Pros: Warranty Coverage: New cars come with a manufacturer’s warranty, such as Honda and Toyota’s 5-year warranties and Kia’s 7-year warranty. Latest Technology: You get the latest safety features, infotainment systems, and technology. Reliability: New cars are less likely to have mechanical issues. Low Maintenance: Generally, only basic maintenance is required in the first few years. Cons: High Cost: Monthly payments can be substantial, adding up to £10,000 to £25,000 over the lease term. No Ownership: At the end of the lease, you don’t own the car and have no equity in it. Mileage Limits: Leases typically have mileage limits, and exceeding them can result in additional fees. Depreciation: New cars depreciate quickly, and while this isn’t a direct cost to you, it’s a factor in the high leasing price. Buying a Well-Maintained Used Car Pros: Lower Cost: Buying a reliable used car can be much cheaper. For example, I spent £2,500 over four years on my Honda Civic, including maintenance. Ownership: You own the car outright, and it can be sold or traded in. Flexibility: No mileage limits, so you can drive as much as you want without additional costs. Proven Reliability: If you choose a car with a strong track record of reliability, such as those from Toyota or Honda, it can serve you well for many years. Extended Warranties: Many manufacturers like Honda, Toyota, and Kia now offer extended warranties (5-7 years), and third-party warranties can provide additional peace of mind. Breakdown Cover: Adding breakdown cover enhances reliability and peace of mind further. Cons: Potential Repairs: While a well-maintained car is generally reliable, there’s always the risk of unexpected repairs. Older Technology: Used cars may lack the latest features and technology. Less Peace of Mind: Without a comprehensive warranty, there’s a potential for higher maintenance costs. How often do you hear of a Lexus, Honda, or Toyota having a catastrophic or major failure, such as needing a gearbox replacement or major engine overhaul, if they've been serviced correctly and treated well? With breakdown cover and a third-party warranty, what more peace of mind do you need? Watching £500 a month come out of my account just for the pleasure of having a brand new car sitting in my driveway 90% of the time does not seem like good value for money. If you’re a rep or use your car for business purposes and you’re in it for tens of thousands of miles a year, of course, it might make sense. But for the average person just pottering around the local town, you sure as hell do not need a brand new car at £500 a month. In summary, with thorough research and proper care, a used car from a reliable manufacturer can serve you well for many years, offering great value for money without the hefty repair bills often associated with less reliable brands. Spending £24,000 on a four-year lease just doesn’t make sense when compared to the cost of owning and maintaining a quality used car.

[@SB-hr5yr]

In my experience, buying a used vehicle from a reputable manufacturer can be a great choice, especially if you opt for models known for their reliability. Brands like Lexus, Toyota, and Honda are famous for their long-lasting vehicles when properly maintained. While leasing a brand new car does offer some peace of mind, seeing £500, £600, or even £700+ per month going out of your account just for that peace of mind isn’t worth it in my opinion. For example, I bought a 10-year-old Honda Civic with one owner and a full Honda service history. It was in excellent condition, garaged, and had good quality tyres. In 15 years, it has never broken down and has only had one issue-a broken coil spring. Apart from regular service items like brake discs, pads, oil changes, and filters, it’s been incredibly reliable. The car has only depreciated by £2,000 in the four years I’ve owned it, which equates to around £40 per month. Including all maintenance costs (approximately £500 over four years), the total cost of ownership has been about £2,500, or roughly £50 per month. In contrast, leasing a new car for three to four years can cost anywhere from £10,000 to £25,000. Here’s a comparison of the pros and cons: Leasing a New Car Pros: Warranty Coverage: New cars come with a manufacturer’s warranty, such as Honda and Toyota’s 5-year warranties and Kia’s 7-year warranty. Latest Technology: You get the latest safety features, infotainment systems, and technology. Reliability: New cars are less likely to have mechanical issues. Low Maintenance: Generally, only basic maintenance is required in the first few years. Cons: High Cost: Monthly payments can be substantial, adding up to £10,000 to £25,000 over the lease term. No Ownership: At the end of the lease, you don’t own the car and have no equity in it. Mileage Limits: Leases typically have mileage limits, and exceeding them can result in additional fees. Depreciation: New cars depreciate quickly, and while this isn’t a direct cost to you, it’s a factor in the high leasing price. Buying a Well-Maintained Used Car Pros: Lower Cost: Buying a reliable used car can be much cheaper. For example, I spent £2,500 over four years on my Honda Civic, including maintenance. Ownership: You own the car outright, and it can be sold or traded in. Flexibility: No mileage limits, so you can drive as much as you want without additional costs. Proven Reliability: If you choose a car with a strong track record of reliability, such as those from Toyota or Honda, it can serve you well for many years. Extended Warranties: Many manufacturers like Honda, Toyota, and Kia now offer extended warranties (5-7 years), and third-party warranties can provide additional peace of mind. Breakdown Cover: Adding breakdown cover enhances reliability and peace of mind further. Cons: Potential Repairs: While a well-maintained car is generally reliable, there’s always the risk of unexpected repairs. Older Technology: Used cars may lack the latest features and technology. Less Peace of Mind: Without a comprehensive warranty, there’s a potential for higher maintenance costs. How often do you hear of a Lexus, Honda, or Toyota having a catastrophic or major failure, such as needing a gearbox replacement or major engine overhaul, if they've been serviced correctly and treated well? With breakdown cover and a third-party warranty, what more peace of mind do you need? Watching £500 a month come out of my account just for the pleasure of having a brand new car sitting in my driveway 90% of the time does not seem like good value for money. If you’re a rep or use your car for business purposes and you’re in it for tens of thousands of miles a year, of course, it might make sense. But for the average person just pottering around the local town, you sure as hell do not need a brand new car at £500 a month. In summary, with thorough research and proper care, a used car from a reliable manufacturer can serve you well for many years, offering great value for money without the hefty repair bills often associated with less reliable brands. Spending £24,000 on a four-year lease just doesn’t make sense when compared to the cost of owning and maintaining a quality used car.

[@andyarmstrong1175]

Blimey that gym's miles away! Just think how fit you would get if you jogged or ran there and back? 😊👍

[@DefinitelyNotAGuru]

😂👍

[@bordersw1239]

Here’s an example why to be careful. MG4 secondhand approved, £20k PCP £2k deposit, 48 months 10k miles £332 per month. Brand new same car, same terms £26k car, £332 per month,just option to purchase was £800 more. Difference - 2nd hand car APR 14.9% New - APR 2.9%.

[@DefinitelyNotAGuru]

👍

[@Markos5511]

I don’t believe the deposit was the same for a 26k car vs the secondhand as the value of the car is less. The deposit has to be more. In every example I have seen the deposit up front has always been less than a new car by over 50%. If you lease a car 2/3 years old often there isn’t any up front cost. I refuse to believe the deposit is the same the monthly amount is the same. Just not possible.

[@Fromatic]

@@Markos5511 sounds possible if the interest rate was so much more, a bigger percentage of those monthly payments would be interest, and as in that example the outright price wasn't too different to begin with, the bigger interest and final payment probably ends up costing about the same overall so I'd believe that or at least it could be close

[@Rob-ml3sp]

Another great video, and my go to channel for up-to-date news on leasing cars and how the market is changing at an incredible pace.

[@DefinitelyNotAGuru]

Cheers Rob, top man!

[@LuisCarlos-r5q]

🎯 Key Takeaways for quick navigation: 00:00 *🚗 Leasing a used car can be advantageous due to benefits like manufacturer's warranty, fresh tires, and lower monthly costs.* 01:23 *💰 Leasing allows access to new cars at potentially lower costs compared to buying outright or using other financing options.* 03:13 *🛠️ Consider financing options when buying a used car, such as personal loans or hire purchase, instead of solely relying on dealer finance or PCP.* 04:20 *💸 When planning to keep a car for a long time and run it into the ground, buying a used car might be more cost-effective despite potential maintenance and repair expenses.* 04:35 *🤔 Leasing a used car might not make financial sense due to high monthly costs compared to new cars, limited warranty coverage, and potential maintenance expenses.* Made with HARPA AI

[@DefinitelyNotAGuru]

Is this an ad for your AI tool?

[@brianiswrong]

My two penith worth. Buy a used car with cash or a personal bank loan, lowest high street APR. then at least you can sell at any time if needs must.

[@DefinitelyNotAGuru]

👍

[@tbrasc0]

100%

[@brianholland8290]

Exactly 👌👍

[@williamfence566]

looking at leasing as I've never leased , always bought outright second hand nearly new but prices are that high now I might as well take advantage of the deals available. Always great advice

[@DefinitelyNotAGuru]

Best of luck!

[@alangravy27]

Sound advice as always. No value in leasing used unless it is way cheaper than new. I do agree with the comments if you are to buy outright, many cars are better buys after a year but finance is often much cheaper on new. Compare the numbers carefully.

[@DefinitelyNotAGuru]

👍

[@BDX55]

With tyres, every lease car I’ve had they have stipulated that only like for like tyres could be put on there so no cheap tyres.

[@DefinitelyNotAGuru]

I’ve had around 30 personally and on fleet and have always sent them back with one or two odd budgets. Never had an issue, nor have I ever seen that stipulation. Our last car couple of personal cars were leased from VW Financial Services, they simply said “tyres must be legal” that’s what I’m used to with others to be fair (I mainly used Arval on my old company fleet).

[@clewis5220]

Morally I just couldn’t fit replacement cheap budget tyres anyway Jim sorry

[@DefinitelyNotAGuru]

@@clewis5220 good for you 😁

[@rimmerblues1586]

I think for some people they want a used model as they may not like the new models coming out and may not have any choice but to try the finance route to get it, however used APRs are so varied but usually high so maybe it's best to get new if they still make it as they have low APR. Maybe time to do another updated video on the differing finance options, Jim. Hope you've had good sessions down the gym - keep at it!

[@DefinitelyNotAGuru]

Cheers buddy. I might just do that 👍

[@dylanwilliams3336]

Great honest opinion, thanks

[@DefinitelyNotAGuru]

Thanks for watching!

[@robsmith1a]

Nothing beats buying a good used car that has depreciated for value but this probably only applies if you don't have to use finance. I bought an 62 reg SLK in 2020 for £11K. It's only lost about £4k since or about £90 per month. So far servicing at an independent has averaged £300 per year and other than that £200 on a pair of tyres.. I don't do many miles so a new car would be a waste for me. Insurance is generally cheaper on old cars too.

[@DefinitelyNotAGuru]

Obviously much depends on reliability, repair bills and costs of major servicing items etc but yes, there are bargains to be had, especially if you’ve got a bit of luck on your side 👍

[@bordersw1239]

I’ve bought my last 2 cars through PCP, both were 2 years old, manufacturer approved, low mileage, one year manufacturer warranty plus extendable at the end of each year. They were half the cost of new and I paid off the PCP at the end. Doesn’t mean I will do it again without careful calculations!

[@DefinitelyNotAGuru]

👍

[@DavidBoreham-kk9dx]

Great advice as usual Jim I can't imagine getting a better deal than the one with the Peugeot 408 from yesterday's vid shop the deal people not the specific car cheers Jim hope your still breathing after the torture session 😱😱😱

[@DefinitelyNotAGuru]

Haha, just about! 👍

[@stevey-nwas1230]

Great advice 👌👌

[@DefinitelyNotAGuru]

Glad it was helpful!

[@user..Aa..Bb..]

I only lease high value cars. I can drive around in something amazing for a low monthly and not worry about depreciation and faults. (Low monthly compared to the actual value of the car and new car have some great offers) If you are looking at a small value car Buy it nearly new or few year old. Bank Loan it or car company finance to buy outright with no balloon. Check overall payment and apr. And at the end the car is yours and you may still have value in it.

[@DefinitelyNotAGuru]

👍

[@clewis5220]

Love your book Jim and love the idea of Jim driving to Gym, emissions free!

[@DefinitelyNotAGuru]

Not quite, I had spicy chicken last night

[@andrewjones5570]

Good vid Jim 👍👍

[@DefinitelyNotAGuru]

Cheers Andy 👍

[@darrenroberts6376]

My brother picked up a new pre registered car on lease with delivery miles a few days before the new reg came out. It worked out £70 cheaper per month just because it looked 6 months older.

[@DefinitelyNotAGuru]

Awesome 👍

[@robinhood007]

Really good video too by the way. Thanks.

[@DefinitelyNotAGuru]

Thanks 🙏

[@Paytonatorz]

Great useful video as always. Love your see as it is approach. I tend to be a buy used person. I have wondered about leasing used. But your opinion on this makes sense. Thanks again

[@DefinitelyNotAGuru]

Thank you

[@Markos5511]

Okay with a new leased car you often have to pay a lump sum up front. This varies on the price of a car but those lump sums end up being 4-6k in value. Then you still have to pay £350-£500 per month lease. With a second hand lease car most of the deals don’t appear to have a lump sum amount and it’s a straight £350 to £500 monthly fee.

[@DefinitelyNotAGuru]

You seem to have your wires crossed a bit, there’s a few things incorrect in that statement. You don’t have to pay anything up front on a new lease if you want, exactly the same with a used lease. By lease we’re talking about PCH. Used car leasing rarely, if ever, makes sense to me.

[@Markos5511]

@@DefinitelyNotAGuru if you don’t pay any fee up front the monthly fees are astronomical. For a Tesla over 3 years it’s nearly £800 per month if you don’t pay a fee. With a used Tesla 3 years old it’s £399 with zero fee needed up front. Most of the old lease cars have 50/60k on which is hardly any miles. I don’t really see the benefit of leasing new. Equally you can buy 2020/21 Tesla’s for 16/17k with 60-100k miles. If you get a loan from a bank it’s even cheaper monthly instalments and you end up owning the vehicle. The batteries are guaranteed for 10 years or 200,000 miles. So again limited risk. I’ve yet to see any lease on a new car that is the same monthly fee as a used lease without paying a huge lump sum up front to bring that monthly payment down.

[@DefinitelyNotAGuru]

Do what makes you happy mate

[@hughrobertson-payne914]

Just found this. Plain speaking and great advice. I'm in the market for a 'new' car and had considered leasing used. But why would you? Lease new or buy used if you want/need something flasher than you can afford to lease. Makes perfect sense. Now just need to convince myself I should lease a new Skoda/Peugeot etc rather than buy a used BMW/Merc, lol....

[@hughrobertson-payne914]

Have just bought your book as well btw, look forward to reading it 👌

[@DefinitelyNotAGuru]

Thanks Hugh!

[@DefinitelyNotAGuru]

You're my new faviourite person

[@hughrobertson-payne914]

@@DefinitelyNotAGuru 😂

[@hughrobertson-payne914]

@@DefinitelyNotAGuru I’ve been driving myself mad trying to get my head around the ridiculous prices of used cars now, I don’t know how buyers justify the cost compared to pre COVID times. I think I’ll relax, lower my sights a little and have an open minded look for a good leasing deal..

[@snubbii9276]

Leasing a used car is entirely down to the make/model and could make good sense for shorter terms on premium makes which are usually exorbitantly high for new. Like you say need a good spreadsheet, the bottom line there is always a value for your yearly motoring (new, used, lease, PCP etc) and trying to minimize it is a juggling act versus how much you tie to having the shiniest thing on the street. Am currently doing the sums.

[@DefinitelyNotAGuru]

I've personally never seen a used car lease that makes sense when you consider the variables that simply don't exist with a new car lease. For the money you need to put into a used car lease usually you could often add a feew grand and buy the car outright.

[@VintageLynx]

​@DefinitelyNotAGuru There are so many good quality used cars under 20 years old that are (if you get put a little effort in) as reliable as a new one. And fully worth buying outright for less than the deposit on many used leases. Of course you will be so far behind the Jones's that will have them laughing, but look after it (not 'run it into the ground') and you can have years of cheap, reliable motoring.

[@mrlv8126]

For me a brand new Audi A3 with the spec l what is around 6k cheaper over a 3 year term when you add it all up..compared to leasing.. That includes deposit and dealer and manufacture contribution…

[@DefinitelyNotAGuru]

@@mrlv8126 as I said in this video and countless others, if you want a very specific car it might not be the best way to go, if you’re open to a great deal you might just find one. I’ve seen an A6 for less than a base A3 in the past

[@DefinitelyNotAGuru]

@@VintageLynx my point here is if you want a used car, just buy it.

[@volt8684]

My tip is buy a non turbo petrol manual car for up to 3k and keep till dead. Pick carefully. Am 65 done all my life. Old man was a garage owner sales and repairs. Told me never to waste money on cars. Latest one is berlingo petrol paid £2200 7 yrs ago at 60k. Had virtually zero problems. Now 17 yrs old and drives perfectly. When it doesnt it will be going. Was ex motability, purchased then by owner and had a very gentle life. IAM a pensioner and these new cars are off the park for me. My dad also taught me diy mechanics within reason. My worry is the age of cars Now is technically too hard for me. However if I had the money I would have a nice car😂

[@bosz4222]

Unfortunately, ULEZ has now killed this idea..

[@DefinitelyNotAGuru]

whatever suits your budget and floats your boat is fine by me

[@chrishart8548]

Cars now are technically to much for any normal person now. I'm getting my company car delivered soon. If it goes wrong I'm glad someone else will be footing the bill. Owning any car now is far to risky

[@PropertyAtAuction]

Great advice

[@DefinitelyNotAGuru]

👍👍

[@Pete.Ty1]

👍👍👍 Once again Thanks Jim

[@DefinitelyNotAGuru]

Cheers Pal 👍

[@belmont22tss]

Great video Jim

[@DefinitelyNotAGuru]

Thanks 👍

[@errollgordon3080]

Thank you . And your health is your wealth 😊

[@DefinitelyNotAGuru]

👍👍

[@robinhood007]

Good luck going to the gym. I need to do that too.

[@DefinitelyNotAGuru]

You can do it!

[@mikadavies660]

As always solid advice.... especially reading between the lines, EVs having dropped so much....they might be the best used buys.

[@DefinitelyNotAGuru]

Yes, maybe!

[@Markos5511]

They are the best used buys. Not sure why but the value of Ev’s seem to half in price after 3/4 years. There’s 3 year old Tesla’s with 70,000 miles selling for 17k. 😮 I saw someone buy a 2017 Tesla that had 200,000 miles on the clock and they still got 180+ miles off a full charge from an original estimated 220. 😊

[@MohtashimAnwarGP]

How did you buy the tesla boss? Pcp? I have got mine on pcp. Looking forward in hearing back form you

[@DefinitelyNotAGuru]

I did a video on it, my business bought it and paid cash, it’s now my company car. It was very tax efficient. I’d have leased it had circumstances been different. I don’t like PCP.

[@wintersun398]

I know a lot of the cheap looking deals are actually quite a considerable chunk of cash up front. For transparency, imo, it should be 1 month upfront. Then you can see the true cost of the monthly lease. First thing I do when I go to a lease site is either set it to 1 month or

[@DefinitelyNotAGuru]

Ok

[@neilpatterson1357]

Well done on going to the gym. Hardest bit is starting

[@DefinitelyNotAGuru]

👍👍👍

[@Superman-nn4nw]

Did you say you’re going to see Jim? lol

[@DefinitelyNotAGuru]

No Gym, he's an evil barsteward

[@iaing9028]

I agree that leasing a 2nd hand car is pointless as the rates are far higher & the deals aren’t cheap enough, but comparing leasing to PCP, if you want to get out of the lease early, this is impossible without paying a hefty fee usually the remaining lease payments. With a PCP it’s much easier to change cars or sell it part way through as it’s just HP with a deferred final payment, if your car is worth much more than the GFV you can usually make money on this rather than just handing the car back. As a consumer you have more financial rights using a PCP compared to a lease. Personally myself I would just buy a 2nd hand car, I don’t like having a date in the future where I’m forced to make a decision on my car, I’ll change it when I want to!

[@DefinitelyNotAGuru]

A lease exit is generally 50% of the remaining payments - I'd never suggest entering into any finance agreement that you intend to break however. The money you "make" is generally smoke and mirrors as you've very often paid far more by leasing the car via PCP than PCH in the first place. Lots of videos explaining this on my channel.

[@iainglennon6118]

⁠@@DefinitelyNotAGuru 0:30 0:31 My friend had a Hyundai i800 on PCP, the actual value was £2500 more than the GFV, he sold it on Auto Trader, the buyer paid him the money & paid the finance off online before taking the car. He was £2500 better off than handing it back.

[@DefinitelyNotAGuru]

And how much extra had he paid before that by doing a PCP??? Probably much more than the £2500 he "made". It sometimes works in a rising market, right now is the opposite however.

[@iainglennon6118]

@@DefinitelyNotAGuru Well maybe that’s correct, but I don’t know the figures. I’m not a fan of leasing or PCP, I prefer to buy a car & keep it until I don’t want it anymore. I have better things to spend my money on such as holidays.

[@no-oneman.4140]

I've lost thousands over the years because I change my cars every two years. Depreciation is such a killer. Never got my head around who decides what the prices should be, don't believe it's the public, suspect the whole trade is like a cartel. My 'better' half has an old Suzuki that she's had for twelve years, never misses a beat. She has the right idea. I'm a mug.

[@DefinitelyNotAGuru]

Leasing is a way of having your cake and eating it, if you choose your deals wisely.

[@dan19752008]

My argument with this is why not lease a 6 month old Toyota with a 10 year warranty?

[@DefinitelyNotAGuru]

Because the used lease would generally cost more than leasing a new one so why on gods earth would anyone do that?

[@Dentos19]

Do some comparisons then Jim👍

[@DefinitelyNotAGuru]

Yes 👍

[@glengosling5636]

😊

[@DefinitelyNotAGuru]

👍👍

[@bryanduncan6178]

What are those funny stalk things next to the wheel?! They need to be deleted ASAP....

[@DefinitelyNotAGuru]

😂👍

[@tbrasc0]

Far too many variables to leasing a used... just buy it instead.

[@DefinitelyNotAGuru]

Lease new, buy used 👍

[@jesuspro6887]

👍👍👍👍

[@DefinitelyNotAGuru]

Gracias

[@jimrandall1739]

✌❤

[@DefinitelyNotAGuru]

👍👍