ACCOUNTANT EXPLAINS: Should You Buy, Lease or Finance a New Car

[@nischa]

👉🏽 My Intentional Spending Tracker (free) - nischa.me/intentionalspendingtracker

[@dipladonic]

I suggest that you buy a 2/3 year old car at auction with as low an interest rate bank loan as possible, then invest your savings in potash (a natural fertilizer) stocks.

[@thewizardsofthezoo5376]

Investing in a second-hand car that holds its value or even increases in value over time can be a wise financial decision, especially if you only need it for transportation purposes. Putting the majority of your money towards a deposit for a flat can also be a smart choice, as property in London tends to appreciate in value over time. By paying a mortgage instead of renting, you are also building equity in your home.

[@julesviolin]

⚠️Absolute madness buying cars in any of the demonstrated ways I run an old car. Depreciation zero. In fact it's going up in value. We go on 2 cruises and 2 other holidays per year. My mate has new cars every 3 years and he's vastly in debt. It makes no sense to me at all. We have the last laugh. New cars are so ugly too with those unstreamlined brick wall ghastly front ends.

[@tof3275]

@@dipladonic Vehicles are put up for auction for one of four reasons 1)finance repossession, 2)dealership dumping 3) the owner suspects a prospective eyewatering fix coming up 4) slight accident damage but still driveable

[@charlesandaling179]

@@dipladonic Where do you buy cars in auction?

[@andrewhurstcars]

The biggest cost of a newer car is depreciation. Probably the most sensible is to buy a 3-5 year old approved used car outright from an official main dealer, which will have a 12 month warranty from the supplying dealer. If you know about common faults, and buy a car in good condition with a full service history, then you can look at 5-10 year old cars either buying privately or at an independent dealer. The main three things are condition of the car, full service history, and look at the MOT history to see if the car has been looked after properly - a catalogue of MOT warnings and failures is one to avoid.

[@JohnCarlyle]

I'd love to buy a 3 year old car that's depreciated, but I cannot find any! Saw a 3 year old electric Peugeot 208 at a Suzuki dealership, these were £25K when new 3 years ago, the price of this 3 year old car.......£25K

[@bushmonster1702]

@@JohnCarlyle ridiculous

[@Pinnednischa..]

T͟h͟a͟n͟k͟s͟ ͟f͟o͟r͟ ͟w͟a͟t͟c͟h͟i͟n͟g͟!͟!͟!͟ ͟C͟o͟n͟t͟a͟c͟t͟ ͟m͟e͟ ͟o͟n͟ ͟W͟h͟a͟t͟s͟A͟p͟p͟✙✙➊➋➊➌➍➒➎➒➌➍➋🔥🔥

[@xTango]

>3 year old car with a bank loan esp when interest rates were very low is likely the best way to go

[@marlonr391]

Buy a 5-10 year old car with full service history, check mot History as stated, and maintain the car yourself, i.e., service it yourself and any repairs in accordance with your competence

[@TheTopStarz]

You have no idea how many people needed a detailed video like this about the different ways to purchase a car, myself included so thanks

[@Patriarhul]

no lease! trust me!

[@hasan_z]

​@@Patriarhul Why not?

[@MrLouislaf]

I’ve always, always kept my cars minimum 10 years. For example, my present vehicle is a Honda 2010 CRV and it’s well-maintained. By keeping our cars a long time, we had money for other things. We finished paying our mortgage when I was 45! We invested in real estate, we travelled, we did something else with our money. The amount of cash people spend on ‘look-at-me’ vehicles (when they really cannot afford it) is astounding. If you choose reliable models, the maintenance is not expensive either.

[@terrybruton2964]

Question when factoring in the cost for maintenance as the car is getting older or kms. Do you end up spending more altogether?

[@prairiehills416]

I still drive a 2006 Honda CR-V with 146k miles. Very reliable, and a great utility vehicle. AWD, 4-Cyl. Better than most high tech new cars. Insurance is cheaper as well. Liability Insurance, only.

[@campbelltish]

'Look-at-me' vehicles 😂

[@harleysteve]

Just got rid of a truck that was in good condition that I had for almost 26 years. Miss it already .

[@avinpertab5051]

I got a 2003 CRV had it nearly 6 years, got 118k. I also had a civic both so reliable... BUT the CRV fuel consumption and road tax is quite bad, BUT still better off overall i think

[@mrmeldrew693]

Second hand car with lowish milage, funded with a personal bank loan is how I have done it. My last car cost £6000, I drove it for seven years and traded it in for £500 when it would never have passed the next MOT. Cant beat that.

[@davidgraham952]

2nd hand car which has had annual oil changes and proper servicing is the answer here. Also - find out if the car has been driven in a stop/start manner OR on highways. The second option means little wear on your engine. Dont be fooled by the LOW MILAGE mantra. Peace.

[@Tensquaremetreworkshop]

Yes, you can. Buy with cash. Buy a newish 2nd hand with high mileage. Ex driving school is good. The discount far exceeds the condition- people worry is is worn, but the price includes such. Bought an ex-school car for my wife, the cost of a new clutch was in the price- but it never happened. She drove it ten years, no mechanical repairs needed.

[@vivayo4588]

​​Hi ​​​@@Tensquaremetreworkshop which car model and maker options would you recommend currently? My 14 year old car (Alfa Romeo) is giving up after 10 years of use (I bought it 3rd hand) and I don't know what to look for to replace it with. The repairs are too high to keep him running sadly. And I would not buy another Alfa. Thanks in advanced

[@Tensquaremetreworkshop]

@@vivayo4588 Alfa's have never had a reputation for build quality. Go for mainstream volume cars, reliable and low cost spares- like Ford Fiesta or Focus, or similar brands. Toyota also have a good reputation. Ask around for someone giving up driving through age- usually low mileage and maintained. Bargains available.

[@Michael.P247]

The cheapest way to buy a car is through an unsecured personal loan from your bank. Get a loan from your bank, shop online & Pay cash for the car, and gradually pay back your bank the loan you borrowed. This works really well for high value cars that you want to use for a long term. Car financing in the uk 🇬🇧 is extremely expensive and addictive, don’t get hooked.

[@MJHKing1]

This is how I did it. Half the money I had, half a very low interest bank loan independent of the dealership and making overpayments when I felt I could.

[@vesleeful]

Nice

[@igormoloko1]

Same here, especially when interest rate was good.

[@trenners1990]

The cheapest way to buy a car is to save up and buy cash..

[@davidt8546]

​@trenners1990 the 1970s called...they want their financial advice back 😂

[@authortimwickenden]

In my 44 years as a driver I have never bought a new car. I buy (outright) good quality cars second hand and run them as long as possible. As I run the car I save up for the next one. It is far cheaper to do this and the car is yours and as such it is an asset, albeit a depreciating one. Great video and I’m surprised PCP has not been investigated for mis-selling - bonkers scheme.

[@fantasyguru26]

I'm an accountant in Canada and I have this question asked of me all the time. Particularly from self-employed individuals who want to know the tax impacts of writing off either a lease or depreciating the vehicle. There are several factors to consider but the most important one I ask my clients is what are your driving habits? If you drive more miles than average its likely best to go the purchase or finance route since leases have mileage restrictions. How long you like to keep your car is another factor. If you like to have a new vehicle every 3 or 4 years then lease option would be preferable. Interest rates also play a factor - generally lease rates in Canada are several points less than finance rates.

[@crush42mash6]

Thanks for your input, I have a rental properties for 30 years ask my accountant about leasing a vehicle he disagrees and thinks it’s not worth it because you’re basically renting a vehicle. My rebuttal to him was, I’m always moving fridges and stoves. I want to get a truck, he doesn’t think it’s a good idea and I’m wondering if he’s just being lazy or doesn’t want to flag to CRA or what his reason is after 20 years maybe he is getting softer what do you think?

[@joeallen8933]

Being in the car business for over a decade, I appreciate this video. A lot of customers have questions about which is the best way to buy, and it mostly comes down to preference based on their driving habits and plans with the vehicle. In order to best help them, we need to ask questions. Many customers give inaccurate answers which leads us to suggesting an option that may not work out for them in either short term or long term. I understand a customer's reservations about providing information to a dealership. However, with the CFPB and other institutions protecting consumers, it's nice to have a video like this to refer them to. Like anything, there's a lot of misinformation out there, but this video is the best at accurately explaining the pros and cons to each option, what's most important to the buyer, and how to make a decision.

[@juniord3997]

@joeallen8933 Do you really believe that garbage about the "CFPB protecting consumers"? The Banks, Car dealers & car manufacturers all work in conjunction with each other and not for the benefit of the consumer. I don't know where you live but car makers have a powerful block of lobbyists and members of Congress are on the payroll. They make laws that make it easy for snake oil salesman like yourself to con the mind controlled unsuspecting general public.

[@megapangolin1093]

Bought a Porsche Boxster S, 15 years old, in beautiful condition, for £5K, drove it for 5 years, sold it for £5K. £1K for repairs and servicing over the term. I don't see any problems in saving money by being sensible and enjoying the joys of driving a fantastic car. Now to choose another similar car and do it again. Thank you for one of the most comprehensive and straightforward assessments of new car buying I have seen. People all over the country are pondering their choices and not knowing how to choose correctly, you did all of that thinking and explained it in 10 minutes. Well done. Great video. Now subscribed

[@tj9382]

Seems to me that you have the best strategy of all if what you’re saying is true.

[@megapangolin1093]

@@tj9382Well, I think it is true, but it is only my opinion, it may not be reality.

[@shaharazad.]

Just the market. I bought a new car for 14k back in college and sold it for 14k 3 years later. Nice try though

[@Stringwar]

That's not a low risk strategy though, you could have easily ended up with £10k of repairs. And only £1k in repairs, servicing, tyres, MOTs, brakes, at Porsche prices over 5 yrs.....sure buddy. Give us the VRM and Years of ownership so we can check the MOT history. Absolute fantasy story.

[@megapangolin1093]

@@Stringwar Porsche prices? No chance.

[@amyg3817]

I just bought a new car and I opted to pay cash. I don't have any stress about monthly payments and high interest rates. Thank you for the info, a few people tried to convince me to lease and I really wasn't interested. Glad to know I made a good decision 😊

[@rugby86]

It’s good you stay firm on your decision, of course since you have researched all the avenues. Enjoy the car you own, for the years to come 😊

[@MrDominic152]

Most millionaires still take out a lease on their super car purchases, that should tell you something.

[@geecars6263]

@@MrDominic152 Because they can usually write the lease off against tax as a business expense

[@BenavidesMariana]

You did good... I will do another video showing the real cost of leasing.... be free and spend what you can. Many people is having a hard time with this. Also today we have so many contracts that are really may have bias.

[@Naalimit_]

Yes it says they are super riche.

[@mary-alice]

We bought our used car outright. It wasn't a cheap used car at £6k. We had saved the money and just paid it. Car dealership pushed to the hire car but in the end we would have spent about 2k more than the buy now price. Honestly I'm really happy to see that someone is explaining financial terms in simple words but at the same time shocked at the amount of people over-spending money and living paycheck to paycheck. Keep making these videos because more people are going to need your advice.

[@Bob-ts2tu]

excellent, someone after my own heart :)

[@stefanosparacio5983]

The whole of the UK has a shocking overspending culture, some realise when they go abroad on holidays

[@LegalizeTheNuclearBomb]

Well I've also bought my car out right. It's a 2019 Mazda 2 SE but I've also been in a Mercedes AMG. I don't actually blame people for financing those types of cars anymore because they're really, really fun to drive lol.

[@olebogengsunday1847]

But 2nd hand new cars only...Cash if you can if not...on monthly payments. You are still saving more than the brand new car owner.

[@lastlast2078]

My used VW was £6k, I would say it's cheap. Spend much less and you're buying too old with too many costly problems. That was 3 years ago and I'm considering selling to buy newer now before any big problems. Checking resale value of my VW, it's held it's value even with the mileage I've put on it.

[@juanignaciocordova9520]

There is a 5th option (at least in the conuntry where I live) which is to ask for the PCP, and once they give you the car you pay the whole amount. That way, you get huge discounts and you do not need to worry about paying interests. Thanks for sharing this video!

[@originalkk882]

Did exactly this with a new VW in the UK. The dealer wouldn't give a discount for cash, but there was a "contribution" from VW Finance for PCP.

[@laz7354]

Agree. Cash is king.

[@open_water2411]

That’s what I did. Saved a lot of money and still have the car 7 years on. Another 3 years and I’ll be back at the dealers again.

[@justwait9822]

Hmmm, there must be another acronym for PCP that I'm unaware of cause this sounds like some kind of illicit drug trade.

[@bobolink890]

@@justwait9822 So right. People just take a bunch of drugs and hallucinate that they got a car for a great deal.

[@utterlyexiged]

This is an interesting one for me. I've always bought my cars outright at roughly 2 years old, and even though its a big outlay, i've always felt more comfortable doing it as i hate monthly outgoings. Meanwhile most other business owners i know swear by leasing and plough that initial saved capital into property investment, or their own homes.

[@Acronoss1234]

It’s true a lot of business owners love leasing in general it gives them more flexibility.

[@shipdog44]

I lease. I'm a real estate investor and I would rather have my money invested and I have a fixed expense. Have the oil changed and no other repairs, tires or brakes for three years.

[@adejuwonodugbesi3102]

Worth mentioning lease has bunch of restrictions, also u are not completely immune in those 3 years if it’s not wear n tear like accident or damage you are paying from pocket my friend, but cheap and outright. Sell when needed. Second hand market still has value.

[@shipdog44]

@@adejuwonodugbesi3102 I live in the US and I drive Hondas which are very good quality and hold their value better than anything sold here. Ironically My lease was up last month, and I purchased the car outright, so I own it now without a payment at least for a while. I'll probably sell it and invest the cash and lease another vehicle at the end of the year.

[@Sam-2468]

@@shipdog44 I'm curious to know what you do/did to be able to get int real estate investing in the first place. Is investing your full time job or a side hustle?

[@ciaranwalsh9963]

Thank you Nischa, wonderful video. Not many accountants have the gift of explaining finance in simple straight forward terms. This is a 5-Star presentation.

[@Bugsy0333]

Are you her husband ?

[@Pbadome1]

@@Bugsy0333 Did you look closely at him?

[@Mirsab]

​@@Pbadome1 ?? Brits can't marry Indians you think?

[@BollywoodMediaOnline]

Agreed.

[@drewtree888]

Simp

[@johnforeman634]

Here’s another little tip that I learned to do. If you’re on a lot dealing with the salesman, when you finally agree on a price, confirm this price with the salesman a couple times. Say something like “so this is the final price right, this is the amount I will be paying?” He will say yes, of course. Because here’s what’s going to happen; he will turn you over to the finance office where you will sign the contract. And on that contract will be in bold print “documentation fee”. DO NOT PAY IT. It could be several hundred dollars. They will fight you on it, but you call in your salesman and say “remember when I asked you if this was the final price”? Get up and start to leave if you have to. They ALWAYS give in. I’ve done it several times. They are NOT your friend. They’re goal is to get as much of your money as they possibly can. Fuck em! Don’t just hand over money cause you’re in a hurry.

[@Notfiveo0]

And that is why the fee is now posted on the walls of most dealerships.

[@highwayhash2541]

It is for this reason you make an offer on the OUT THE DOOR PRICE (OTD), and let them break it down however they want to on their bill of sale. Calculate your Out the door price based on the Price of the vehicle (after negotiation), tax, tags and title. Now, how the tax is calculated, Tags and title fee are available on the local County's DMV Website in the USA and you should not pay a penny more than that. So, you have to do your research well in advance. You can also call your local DMV and ask them for these details. They will tell you how much would be the tax, tags and title for a certain model of the car. Out the door bill of sale in your mind should only contain - price of the vehicle, tax, tags and title. You then offer this number to the dealership, walk away if the dealership doesn't agree on this OTD number.

[@bluwng]

You should read the comment I wrote . This is just another dedicated young person who can’t see the Forrest for the trees.

[@RavarsenBlogspot]

Thanks I’d rather buy Tesla than deal with this

[@adamf.8564]

No sales person will give you out the door prices in the lot standing next to a used or new car. NO way.

[@torgutm]

Recently found you and enjoying your content. I do work in the trade and regularly have to explain these options to customers. Be careful as lease agreements do have an element of interest buried deep in there. Also, you never touched on the good old fashioned bank loan, often the cheaper method of lending. You can often gets these approved and funds transferred in minutes online. Factor in depreciation on top and the actual cost becomes apparent. How to purchase really depends on the car itself, the individual, their usage, requirements and general temperament. Finally, I’m glad you touched on opportunity costs. This is a fantastic area to delve into. I’ve often shown customers with mortgages what the true cost of paying for the shiny new car outright means. It’s an eye opener!

[@Pinnednischa..]

T͟h͟a͟n͟k͟s͟ ͟f͟o͟r͟ ͟w͟a͟t͟c͟h͟i͟n͟g͟!͟!͟!͟ ͟C͟o͟n͟t͟a͟c͟t͟ ͟m͟e͟ ͟o͟n͟ ͟W͟h͟a͟t͟s͟A͟p͟p͟✙✙➊➋➊➌➍➒➎➒➌➍➋🔥🔥

[@trish25star48]

This was really helpful!! I bought an AUDI TT a few years back - when analysing the figures on the PCP and the charges I would end up paying, I decided to get a personal bank loan. The interest rate was way less Vs pcp. I now also own the car outright and hope to sell it very soon to take advantage of the used car boom, hopefully I’ll get a decent return!

[@MrBottlecapBill]

Yup........personal loan or if you already have an open line of credit, which usually has a much lower interest rate, use that and make your monthly payments to yourself.

[@DavidEVogel]

decided to get a personal bank loan. So there is no lien on your title?

[@SenszR]

I’d say be quick as used cars are well on their way back down lol 📉

[@lav7161]

How much?

[@Billy2w]

Best option mate

[@Cajundaddydave]

Thank you Nischa for a thorough overview of car purchase options. Although I have purchased many new cars in the past with 20% down and monthly payments, I have not purchased new in the last 10 years. I feel that quality modern cars like Toyota, Lexus and Honda are far more reliable than cars of just 20 years ago so I typically buy a 5 year old that has been well maintained @ 40% of the new car price. Sometimes I will use financing as a negotiating tool as the dealership will get a cut on the loan and I will get a favorable price. Then simply pay off the loan a few months later and own the car outright. Lease purchase may be favorable to business owners as they can write off some or all of their lease payments as a legitimate business expense, lowering their overall taxes. We typically logged far too many miles on the car which would trigger a stiff milage penalty upon turn-in after 3 years. For us the lease option did not make sense. Cheers!

[@sali2998]

Well done. Very clear and to the point. I personally think buying a 3/5 year old car outright or on a interest free credit card is the best option. With the card you can spread the payments, will cost you nothing extra.

[@eetwtszdfsregreshteshu]

very smart

[@audify3833]

its also the only halal way along with leasing tbf, just need good credit score. I'm young and would definitely try to do this hopefully

[@zogzog1063]

I thought 'interest free' credit card was an impossibility. Yes if repay within a month, but this is longer term right? I am in NZ and the rules might be different. It would be fab is there was interest free credit. Would you mind elaborating. I just (2024) bought a 2017 Kia Sportage outright but wanted to get a later model.

[@sali2998]

@@zogzog1063 I'm not sure what the system is like in New Zealand but in the UK you can get a 12 or 24 month interest free credit card for purchases. So you can potentially buy a car and as long as you pay off the credit card within 12/24 months, you'll have paid zero interest.

[@tinle9183]

Great video but you forgot to mention one of the key features of a PCP/Lease deal which are the mileage limits set out at the beginning of the agreement - as this is one of the main factors that determines how much the car is depreciated by. This could materially affect the value of the car at the end of the agreement term (for better or worse) and one key thing you need to consider before taking out the deal. Your car could be worth more or less than the Guaranteed future value and you may end up having to pay more (or indeed have equity returned to you) at the end of the term if you've overshot the original mileage limit.

[@pipoo1]

The depreciation should be factored into the PCP/Lease from the beginning which is why it’s important you are honest about the kind of mileage you do at the start. The difference with lease is the risk of the faster depreciation is more on the finance company than it is on you, whereas with a PCP the risk is wholly on your shoulders.

[@mcscotty1625]

Buying a 2-3 year old car works for me. I keep them for at least 15 years. Costs including depreciation, tax, insurance, maintenance, repairs is around £1500-2000 per year

[@quex213]

You are the type of person who provides invaluable information which can change quite a lot in a person's life, but it is not just about information, it is about an insight and educating others about probably the biggest difference maker, which is mindset. You are amazing.

[@mohitbhagwani]

Hi @nischa, I really enjoyed your video and it covers pretty much everything you have to decide financially when buying a car. Although, you have not covered one aspect which I have used to buy a car. You can take a personal loan from the bank and use that cash to buy the car outright, while repaying loans in EMI. Often interest rates on the personal loans are cheaper than the financing the car. Even 3-4% savings is a huge amount in a long run.

[@JohnyWallker1]

Yep, bought a 2018 BMW; took a 7k personal loan for 2 years at 3.5% APR.

[@JimSefton]

I thought that, and spent a looong time negotiating with the dealer. They ended up throwing in a 3 year servicing deal with free MOT's that balanced out the difference. Not sure if they fooled me in some way, but seemed to make sense at the time.

[@chuck1622]

@@JohnyWallker1 Where are you from that an unsecured personal loan is less interest? Most manufacturers rates are well below personal loan or credit line rates. At least in Canada anyway, and I imagine same in the USA or Europe. And surely not recently at 3.5%.

[@JohnyWallker1]

@@chuck1622 very much depends on your credit score, how much cash you already have in the bank as well as all the special deals you get with your bank. I took the loan from the bank where I keep my main accounts. When I took the loan I already had cash in the bank way in excess to cover the loan straight away a few times over. I've been a customer with the said bank for over 10 years and they knew very well my income and expenses and how much cash I normally keep in the bank at any point in time. I initially wanted to borrow less (half of the sum) at a much higher APR, however, the bank came back to me with a deal to borrow more than I needed at a lower rate. I also took the loan during a time when interest rate (in the country where I live) was close to zero. Finally, now thinking about it I must admit that I paid a one-off fee (when I took the loan) that would otherwise raise the APR from 3.5 to 5%.

[@electricfeel007]

@@chuck1622 I want to know where he is buying a 2018 BMW for 7k? I can flip those all day long.

[@GeeDeeBird]

Thanks for this. Two observations. One should also compare the interest rates to purchase or to lease the vehicle. They may differ substantially. More important, if you are getting an EV, you should consider the effect of tax rebates. A federal tax rebate of $7500 and a state rebate of a lesser amount may substantially lower the one year ownership cost of buying or leasing an EV, particularly if you trade it in annually (assuming you can get the tax rebate once a year). We bought a 2023 Chevy Bolt for $30K a year ago. We got a $7500 tax rebate, making the final purchase price $22.5K. (plus tax and registration of about $1.2K.) Sadly, no state rebate was offered in 2023. We recently traded the Bolt in for a 2024 VW ID4. We got $23K for the Chevy, making the cost of driving it for a year $700 after claiming the federal rebate on our income taxes. After dealer incentives, the ID4 price was $42K. In addition to a $7500 federal tax rebate for the VW, we enjoyed a new $3500 state tax rebate! As of 2024, the federal tax rebate is transferrable, as is the new state tax rebate. So, the $11K tax rebates came right off of the sale price, also reducing the sales tax. Subtracting the $23K trade in and the $11K rebate, the final cost to trade up to the much nicer ID4 was $8K ($9.1K after taxes and registration of about $1.1K). We could have gotten a similar deal on a Chevy Blazer EV or another qualifying EV, but my wife preferred the VW. Given the projected prices of - and improvements in - EVs in the coming year, we expect to trade the ID4 in for a new EV in 2025. At least two more manufacturers will have qualifying EVs by then, and both the range and the charge rates are expected to improve dramatically. So we will again be upgrading to a nicer vehicle. We will (again) pay little or nothing for driving the ID4 for a year. When the tax rebates expire (around 2028) we will probably keep our final - state of the art - EV, having paid nearly nothing for it, and enjoying a long balance of warranty before incurring any service costs. Since the maintenance costs on EVs are essentially zero, we won't be paying for gasoline. And, since we have residential solar electricity.... Well, you can do the math. I'm really surprised how few people are taking advantage of this incredible windfall! Again, thanks for sharing!

[@robedmund9948]

Option #1 is the only way to go. Pay cash. If you can't, save until you can. In the US a lease is called a FLEECE.

[@evanl889]

By Dave Ramsey.

[@ronbonora7872]

I agree!

[@r1pfake521]

Unless you have high income and want a new shiny car every 2 years, then leasing makes more sense than buying and selling every 2 years.

[@chico1287]

Great Vid Nischa. After many years buying new cars outright and selling them on for a loss I decided to try buying older cars with above avg mileage from the now ubiquitous car discount supermarkets. The cars being sold in these supermarkets are normally ex fleet/mobility cars so you will need to be a little careful on how to pick a car that has been well looked after (check the interior, body and boot) and well maintainance records (make sure it has a main dealer service history and no big gaps between services e.g. I bought my dream car for 16.5k that was 3yrs old with 50k miles inc regular services at a main dealer. This car would have cost me 36k new given it had all the options I was looking for. I can still sell the car for 12-13k today after nearly 5yrs ownership... This is not for everyone but I think buying new is too costly in that you pay all upfront and then suffer depreciation over time. Best to get a good used car in my opinion with options that will make it desirable and hold its value.

[@Agent_Paul]

I got mine on a HP. That said, your finance status in the UK will play a role on which option you choose to follow. With a hire purchase, I can still sell the car and pay off my outstanding loan. As I don't see a car to be an investment, I wouldn't recommend paying cash for any car worth over 15k.

[@davidalder6558]

Excellent analysis Nischa. I did your last option of buying a 3 year old well maintained Honda outright and it has been fantastic. Owning also reduces insurance costs. When you finance in Canada, you are required to have full insurance coverage. Buying outright and being a bit of a risk taker had me paying just the minimum legal insurance. I let the original owner take the depreciation and the shipping costs. Dave

[@simonw3872]

Same. Honda is probably the best name to bet on. 👍

[@bradparmar4728]

Yes, in North America there is a charge called preparation n shipping on Top of the negotiated price of A New vehicles only!

[@Willhill12345]

Really interesting video! As a young person i wish I’d been tought this sort of thing in school. I had PCP for years and was sick of being ripped off so last year I bought a used audi TT from a private seller got it under retail price and got a loan, putting down 23% deposit best thing I ever did

[@x.kasiouris5503]

I am thinking for the pcp but witha big deposit and the intention for a final balloon payment

[@pobsdad]

If you have a decent credit score try going for a 0% credit card. My last one had £5000 limit and 34 months! That meant I could pay for the car and just pay £25 a month for nearly 3 years, then pay off the loan with no interest. In fact I put the £5k in the bank and earned a couple of hundred! I also had protection from my bank if the deal went sour. Win, win! Those cards are getting harder to get and with shorter terms, but still worth looking at.

[@manni192]

Great video. If I had the money, would always buy a 3 year old car outright rather than finance. Covid was a strong lesson in how quickly incomes can change for 90% of the population and a monthly income is not guaranteed

[@lornestein7248]

I'm always stashing cash away for my next car purchase. Thinking I'll be ready to buy in 2-3 years. Hoping the used car market price corrects by then.

[@ianh.6825]

Year 2000 Nissan Primera. I paid £350 for it in 2016. It had a genuine 45,000 miles. It's 100% reliable, is good to drive and still shines up pretty well. I do all the servicing and maintenance myself.

[@dwaynelamberts3696]

Are they good cars?

[@craivold]

Great effort Ian. Cars generally got pretty good in the late 90s onwards (especially if you stick to Japanese and some German stuff). If economic motoring is the main priority when buying a car you'd be mental to buy new. My current car (TT 3.2) cost me 2.1k. Costs me about 500-600 a year to keep it on the road. Drives lovely. Depreciation, zero 🥰

[@ianh.6825]

@@dwaynelamberts3696 Yes, I think so. I've owned two. They were praised at the time for their build quality and handling. You have to consider that the newest Primera in the UK is going to be about 17 years old now. I don't see many on the road now, but it's worth looking out for a good one on AutoTrader, Gumtree, Ebay, etc. which you'd probably have to pay more than £350 for. I was lucky!

[@SenszR]

Where did u get such a bargain

[@randymcgaugh8194]

Second owner of a 97 Buick LeSabre which was purchased in December 2004 with just under 43,000 miles. Price was $5,000 on a 3 year loan from my credit union. It has 229,000 miles on it and costs gas and oil changes along with scheduled maintenance. No major repairs and drives as good as the day I purchased it.

[@carlsimmons305]

I have generally done fairly well in getting a worth while deal when purchasing a car…. Depending on which country I have been in depends if I have bought new & or used. If UK I tend to purchase outright & as I look after them, don’t put huge millage on I can usually get a good deal when coming to sell. I personally like the idea of not having monthly outgoings, however everyone has different requirements/needs. Interesting video, thank you 😊

[@jdmcastelino]

Great analysis ! Quite similar here in Melbourne Australia. I own and operate a business and always use the hire purchase option because of the opportunity cost of up fronting the full value of the car. Our hire purchase option does not require a deposit because it is registered to a business with a great credit rating. Also, we never purchase a brand new car - it loses 10-15% of its value as soon as you drive it out of the showroom although, arguably, in these times it may be different. We always purchase a demonstrator or a very low mileage vehicle that is dealership sold and is covered by the statutory warranty. At the end of 5 years, we sell the vehicle and hire purchase a new one for another 5 years. This way, we protect our cash flow as well as receive a “bonus” into the cash flow when the vehicle is sold. Moreover, we claim depreciation annually on our tax returns.

[@bradparmar4728]

ie, due to commercial reasons. Plus Differnt countries have different Tax implications!

[@patrickroos739]

A well maintained and serviced car with low mileage and 2-3 years old is basically still in new condition. Also often checked and serviced by dealer who will add 12months extra warranty. This is a very sensible buy regardless of financing. If you have the cash this is the best option.

[@Stratulax]

I took out a bank loan at a pretty decent interest rate and paid both cars off well ahead of the term. For my next car I’m considering a signature loan together with some of my own money, but I am still weighing my options and shopping around since things are a bit more crazy lately. I’m also considering one of the car services where you shop for cars via their online store and the car is delivered to your door. This might be the best because you can not only shop the options and colors, but get more of exactly what you’d like or want with the most minimal effort, IMHO.

[@dennistonrockstone]

What cars were they? if you dont mind me asking

[@Probity100]

Is this a USA or UK thing ?

[@CianPacifico]

Here comes an another amazing video 😊 ... Thank you Nischa, I wonder how you manage to put quality content every week...

[@nischa]

Glad you enjoyed it!

[@CianPacifico]

@@nischa 😊

[@silverfoxsilverfox6932]

​@@nischaI ended up buying my new car out right. It was expensive , I ended up paying around 75k cash which included car detailing, car security and insurance, comprehensive and gap .

[@davidmer968]

Amazing job at breaking this all down for us. I've always purchased cash, and it's worked out great for me. If you're mechanically inclined, just purchase a used car just under the end of warranty and you're golden.

[@zoneheadza5916]

Buy certified. It gives you a car that’s had all fluids changed, new tires and extended warranty of some sort. You can add extended warranty as well. Some even offer lifetime car washes.

[@superduper9357]

One thing to remember with lease is remember to not hand it back with damage. The lease company will make the repairs with their preferred repair company and you will get rinsed!

[@philiproberts6947]

Not always true,yes with some companies but not all. We have leased for around 10 years and we always ask for any damage charges up front before starting a new lease. For example my wife’s previous car had a couple of car park dings and stone chips and a small dent in the rear passenger door where it blew open trying get the baby in the back one day,and some wheel kerb damage. For all this she got charged just over £200 at the end of term for damage which wasn’t consistent with wear and tear. Our lease company sends out vehicle inspectors when it goes back to prove no damage was done while it was taken back. But as you say it’s something you definitely need to be careful of and also potentially have money to one side just in case.

[@dg-hughes]

Every scratch, every blemish, every stain on the carpet, every scratch on the windows. Unless you lease again and all those unforgivable things are... forgiven.

[@theDADA-agency]

I always buy my cars: second hand, in cash and keep them between 8-10 years...I see friends with super cars and leases, and sometimes wonder if I am the one who is wrong... thanks so much for this series, so useful

[@melsagelord3991]

You’re right. It’s just a car. I’d much rather have money in the bank for other priorities.

[@corkandi]

@@melsagelord3991 Exactly! I love Audi/VW/BMW cabriolets but have been just as happy driving 'runarounds' for years. I'm now looking at buying my third cabriolet, will only pay cash for anything up to 12yrs old, but won't spend more more than 9 grand. I know it's an individuals choice but forget bank loans & HP for new & nearly new models.

[@NomadJRG]

@@melsagelord3991 all depends on your own priorities. I love cars, so don't mind spending a fair chunk of change on owning and running a fun one. If a car is just A to B for you it makes sense to buy something second hand, cheap and reliable.

[@pancakesgo7995]

The way I do it is to find the best personal loan and buy a 3-5 year old car outright. Cheapest monthly repayments and I'm not worried about putting dings on the car or watching the mileage. Usually run them into the ground, hopefully long after the loan repayments finished, and repeat.

[@DickusCopernicus]

Never buy a new car. Buy a secondhand car, and run it to the end of its life.

[@pwilson2345]

You'll spend a lot of money in repairs in the midst of running to its end of life.

[@Musician-Lee]

I do around 40,000 miles a year. Everything other than tyres and insurance is included in my monthly lease payment, most of which is set off against tax as a business expense, so the net cost is extremely low. If I didn’t use my car for business I might buy a second hand car. The best way to buy and finance a car depends very much on what you want it for, and what tax relief might be available.

[@apkathompson]

Got a love comment that gives no details to support its argument.

[@olebogengsunday1847]

I stand by that too. 2nd hand car all the way.

[@cliveuuking4602]

I've got loads and loads of money. I'm buying a new car.

[@toyotahilux2]

Always bought a 2 or 3 year old car and kept it till its about 8 years old and done over 100,000 miles, by that age it doesn't matter so much that ive serviced it myself and saved a fortune on garage fees

[@cesarkastoun5752]

Very good video. One additional complication is that, often, maintenance is covered as part of the lease payments. So you’d have to add maintenance costs to the Hire Purchase option, to make it comparable. Also, 11% on a 3-year car loan? Wow. Currently paying 0.9% on mine….

[@stephanemorin7145]

noone gets 0.9% Bank of England rates are 4% you can only get 0% PCP on a new car when you pay the full whack. 11% is the average for a HP or PCP loan most people pay lot more right now.

[@geecars6263]

Point me in the direction of that deal, I can get the best part of 5% on a fixed rate bond, so borrowing at 0.9 would be great

[@1d2a3d4d5i6o]

@1d2a3d4d5i6o 1 second ago if you had gone to a broker depending on the car they offer you a discount and if you go for PCP they give you a discount I have just ordered my next car a Skoda Octavia SEL 1.5. retail £30,000 doing it through a broker and PCP i have saved nearly £7,000 and you can still pay it off in 2 months so it is yours..PCP payments are only the minimum amounts you can pay, you can pay it off. Good luck oh and at the moment Skoda are selling 2 years servicing for £250 if bought on PCP.

[@bilaalkhalifa5159]

Hi Nischa, firstly thank you for your video's, finally somebody from the UK, helping others in straight forward simple language that anybody can understand, love this video, if only you recorded the conversation it would be funny, seeing the sales team scratching their head, as they've been beaten at their own game 🤣 Thank you again God reward you for your efforts ❤️

[@jimc4839]

😘😘😘😘😘😘🤣🤣

[@lifepassion4743]

Not sure why you think the sales team was "beaten at their own game"? It sounds like she has been given good advice and information. All thats happened is someone has gone to work and has had their times wasted by someone who wasnt interested in buying a car. Yeah thats hilarious.

[@DavidMcCluskey-o5j]

As some who spent most of his career in the automotive industry, I’ve had the benefit of driving new cars throughout that time. The largest cost which most consumers don’t take into account is the cost of depreciation. Your analysis is very useful, as it shows this can account for circa 40% to 50 % of the new car’s value over three years. To mitigate some of the cost of depreciation, my own take would be to either buy an ex demonstrator or used car which still has a significant period of the manufacture’s warranty remaining.

[@andyglawe7804]

I usually go for high performance cars which are older and well looked after. These cars usually have a value which sits within the enthusiast crowd and hold their value. You have to be prepared to look after them mechanically to a certain extent to ensure they maintain their value. It's not for everyone but I buy my cars outright and my running costs are way lower than leasing,pcp, hire purchase etc. Fuel is usually the biggest factor but I do around 3500 miles a year.

[@thealexleamy]

Damn you barely leave the house lol I do 3500 in 2 months

[@andyglawe7804]

@@thealexleamy I do more mileage on my bicycle

[@bendutton]

no point owning a car if you drive 3500 mi per year. thats a collectors item not a car , at which point cost analysis has no bearing at all.

[@DubSalvation]

@@bendutton exactly 😂

[@iceman846]

Sooooo what is the best option? Did I miss something

[@marekkuzian]

Great comparison. I always felt buying outright a few year old car is the best option (and have been doing so for years) but never went through the efforts to calculate it all.. very informative and handy, also very clear. Thanks a bunch !

[@vondoomgaming1224]

One thing to consider with leasing is that if your car is stolen or written off, the insurance company will only pay the market value of the product. If this value doesnt match what the leasing company company debt is, then you could find your self with no car and many thousands of pounds of debt. If this is your chosen route, then I would strongly suggest taking out gap insurance, which covers any shortfall. I used to work in the insurance industry, i found multiple cases where a car had been stolen or written off , within the first 3 years and due to depreciation, the insurance payout would be far less than the outstanding debt with the lease company (£9000 was the worst i saw). If leasing then gap insurance is something you should heavily consider.

[@improveu7340]

Thank you so much. I really like how you dove deep into comparing the numbers, as well as comparing the benefits and costs of the different options. Very well done and much appreciated!

[@reptoid7340]

I don’t have to worry about car dealership ripping me off!! A) I conduct my research on which car manufacturers focuses on quality and reliability B) once I establish that I either buy used or new depending on the incentive at the time.. c) once I purchase that vehicle I keep them for a very long long long time!! Because vehicles are a depreciating asset so I tend to drive them till the wheels fall off!! Fast forward today: my Toyota Tacoma is 11 years old, no mechanical issues! Simple oil and tire changes! Paid off the truck like 8 years ago!! Investing all the savings into real estate and stock!! Paid off two homes and driving my truck with windows down like a boss while watching others complaining about being broke 😂

[@radio-controlledcouk]

The 5th and correct option is to buy a car you can afford now second hand. If yoir getting finance for a car.... you can't afford it and all 4 options are ripping you off

[@donaldtucker4914]

Insurance costs also have to be taken into account. If you lease, the insurance is often included. Also, if you take finance, you might need to insure the potential gap between the market value and the outstanding finance in the event the car is written off.

[@ByronUK]

Great videos. Children should be taught this at school and it should be included on the curriculum. This is the reason a lot of young people get into debt as they are not taught what this all means. Keep up the good work

[@ppppp789]

isnt that just maths lessons?

[@ByronUK]

@@ppppp789 No. Learning about finance, mortgages, savings, interest etc. is not taught

[@commentsonthetube14]

Thank you for talking about opportunity cost! Nobody does this in the finance space on KZbin and it blows my mind. If I can finance at 1% give me as long as term as possible and inflation will pay it down for me, not to even mention investing the money myself. I'd rather I make gains than the bank. Of course, if the best you can do is 9%, pay cash. But I see promotional rates a lot.

[@johnristheanswer]

Got to be careful with PCP. I got an Audi A4 and was told it would be worth £10k after 3 years. When that time came they offered £6k. It was immaculate, serviced with them and within mileage contract . I felt robbed.

[@zainulaabideenmulla]

Great video, I’ve always leased my vehicles as I prefer to change after 2/3 years. The lease market is all about getting the best deals possible. For example, I pay £275 a month for my current car, which has a market value of £40k, and would’ve been around £900 on a PCP agreement. As mentioned in the video, it gives me flexibility to invest my funds elsewhere too!

[@richgl31]

Non-returnable Deposit?

[@zainulaabideenmulla]

@@richgl31 Yeah, lease deposits are non-refundable, they count as part of your overall payments for the car, the more you pay as a deposit, the lower your monthly payments

[@marciabraga221]

Hi Nisha. I know this video is a year old but it's very actual. I mean, your explanation is quite timeless. Very useful. Thanks. I chose the first option. But, I had no money so I had to buy a small moped. 49 cc. And I used American government COVID rescue money. Around $2300. At that time I was 3 months behind on my rent after losing my job. So I chose to use the money to buy the moped and work as a Uber delivery. In 5 months I paid my debit. Kept going for another year and at the end I had a month worth of my bills in a savings account. Got a job because delivery is hard. Now I have 7 months bills on my savings. And I am applying for a better pay job.

[@franchic9565]

Kudos to you for a really interesting and super clear video ! Very helpful comparison. Another unexpected cost to factor in for a Lease or a PCP is perhaps a more expensive insurance policy providing better coverage. I leased my last car, and was so stressed about getting any nicks or bumps on it, that I got an insurance policy which was a lot more expensive that what I'd usually get. I later bought a used car outright, and just got liability insurance which helps me save a lot on car insurance. Also, with a leased car, there might be times where you're reluctant to use it for long distances in order to avoid going over the mileage, but then you spend more money on airplane or train tickets, which can get expensive if for a family......

[@colechapman6976]

Exactly. Also, they nickel and dime you if there is a scratch or scrape on the car. If a shopping cart hits it, it could mean lots of fees from the person you leased from. When you buy a car, it is just cosmetic damage. I also think people get into this headspace where they need to spend 600 a month to get the latest and greatest in tech when a car from five years ago has all the conveniences one could need depending on the trim you buy. I would also never want to lease because of the uncertainty of the economy. You never know when the next job loss might occur, if you get into a personal accident, or if something else happens. I would much rather feel secure knowing nobody can take my car away if any of those occur. Imagine leasing, losing your job, being unable to pay the lease price, and you end up with no car in a car-centric society such as the United States. It just makes things that much more difficult for you.

[@malvinking4914]

very good info

[@stevegeek]

Nice analysis. Personally I would NEVER buy a car from new. The depreciation is just crazy. Much better to buy a 2 - 3 year old car, preferably from a main dealer with some warranty cover. I also avoid using main dealers for servicing / MOT since they are typically more expensive than an independent garage who services all makes. I also prefer to pay cash so I’m not charged any interest, but I might consider a 0% finance deal (not that there are any these days!). Look after the car, keep it serviced and drive it until it has done 150k miles or 8 - 10 years old. I’m not interested in trying to impress the neighbours with a new car every year!

[@ukaszrozewicz7488]

Really? Check how much cars cost 3-4 years ago and how much they cost now.

[@stevegeek]

@@ukaszrozewicz7488 Do you mean new or used car prices? I know both have gone up and I know used car prices are higher than they were, relative to new. I’d still never buy new though.

[@Sapphic288]

@@stevegeekok so you know that but still would prefer to buy old. When you can get a new car at the same exact price. Until the market for used cars go down. It makes absolutely no sense to buy used rn. New is better at this moment. And trust it’s going to take YEARS, for the used car market to go down.

[@DeeDeeDanone]

PCP worked best for me this time, as the increase in the second hand market meant I gained £4200 equity in my car when selling and paying off the balloon payment. I could have never gained that £4200 had I leased.

[@daztastic147]

Would have been good to incorporate the company car option into this video taking into account the financial allowance sacrificed and the additional benefit in kind payable. After weighing up all options some time ago I opted for the company car option, but in some circumstances the options covered here may be preferable.

[@Peteristrate]

Indeed. The company car option is even better if you have a company. At some point, my accountant advised that it's more tax effective to buy the car in your personal name and then rent it to the business. While, if you buy it in the business' name, then you can add it as a business expense, and if you get it as Hire Purches or Lease, you can claim your VAT back on it as well. Also, the car principal/repayment is a cost to your business so it saves you tax on profits. And, lastly, the car becomes a depreciating asset in the company which saves you even more money.

[@Peteristrate]

What contract did you go for (or which his the best), ior a business car?

[@agassi19griff]

It is worth noting the lack of flexibility with Lease. Although your leasing company may allow you to vary your mileage during the term, you are locked into the agreement. In order to exit early, the best you can hope for is to be liable for 50% of the outstanding payments. With HP / PCP you can sell the vehicle and pay it off. Lots can happen in your life during a four year term

[@dash-ryan]

The cheapest car is the one you already own. I invest for my retirement annually. Therefore, I always finance my car and keep it for 5-7 years with extended warranty, which means it's usually an awesome vehicle so that I don't grow tired of it quickly and I have money left over to invest in my retirement fund. I've found that even a car with average reliability will cost less annually for maintenance than monthly car payments. Like I said, given car prices these days, the cheapest car to own is the one you already own.

[@sidathwijeratne7168]

Not necessarily, my old car was only worth about £1300, but it needed new suspension components which wasn’t economically viable to replace

[@oscarcorral2249]

I purchased a used certified card from the dealership because it was way cheaper than a brand new one and had warranty for 3 years. Negotiate a low interest rate. Last Friday was last payment, I was done earlier than plan due to me making higher payments, I kept up with the maintenance, car is in great shape, plan on keep it for many years to come, and looking forward to not having to make those payments anymore.

[@Jarob9]

I went to a dealer with the intention of purchasing a Genesis GV70 3.5. for cash. In discussions, it came up that I qualified for a 1.9% finance option. However, I did not want a monthly payment of nearly $1000. Although not the very cheapest option, I opted to put $25K down to reduce my payment and financed $30K. I did well on investing the $30k, so I was happy with this "Hybrid" decision. I considered a used car, but the pricing was only a few thousand less than the new one with a longer warranty. Thank you for all the wonderful content and I am so happy I found your channel. Cheers!

[@hassanbazzi3545]

Leasing doesn’t allows me to drive more than 10 miles a year or I have to pay a up charge per mile. Buying is also allow me to negotiate the price to lower price than what the dealer is asking. Pre owned is not a good option due to lack of proper maintenance. Fantastic video and very informative

[@xbabygirltx]

I agree. My mum has often told me that when you have a lump sum of money/cash, you have more options and a stronger position for negotiations when purchasing cars & property.

[@davidprentice8108]

Thank you for explaining this important topic in such simple, understanding terms. I live in South Africa. I'm also an accountant. 😊. Generally I purchase a 2 year old 2nd hand car from a reputable dealer with around 40,000 kms on the clock. That would normally allow you 20-60,000 kms and/or 2-3 years of manufacturers service plan and warranty.

[@vAwake]

I buy second hand cars from local mom and pop shop mechanics. They are fixed up and I always pay under market. The last one I purchased outright was a 3 year old Honda Accord in 2015 for $6,700 when the market tag was 11,500 at the time. 9 years later, the car is still going strong.

[@antonharefield8341]

I bought my car outright, but raised the cash via a personal bank loan, which had much lower interest rates than offered by the dealer. The car is mine from day one and I have the flexibility to pay off the loan at any time, (asuming I have the resources to do so).

[@grahamnewton4381]

The last few cars we have bought have been ex demonstrators. These are new cars registered by the dealer and used by prospective buyers for test drives. They are usually 3 to 6 months old, low mileage, with the remaining warranty period still available. In this way you get a virtually new car still under warranty much cheaper than buying new. After about 6 to 8 years we pass the car on to our daughter who uses it for several years. We normally pay the full price up front when buying a car.

[@OD1sinclair]

Financing with O% interest rate is the best option! I bought a 2020 Chrysler Pacifica Limited in 2019 and I have been making the minimum payment….its like paying for your car in full but over 5 yrs

[@nirmalkumarnr]

You also have to consider the cost of maintenance during the period this further points to leasing option

[@seanfallon4580]

I bought a VW california in 2021 here in Ireland, i sold it in 2022 and i made 7k on it Then i bought a Toyota Auris 2011 year for 5 k and ive had no issues with it so far ,only routine maintenance Hopefully ill get a few years out of it 🙏 Great advice and great video Thank you 😊

[@Jackzuk]

I have always brought my cars outright, spending 8-11k. Some of the cars have required fixing including one car needing a new gear box but its still been cheaper. 2010-2015 - mini - cost 5k, sold for 2k, maintenance 3k. Total cost £6050/1210pa/£101pm 2015-2017 - bmw - cost £8.5k, sold for 5k, maintenance £2250. Total cost £5750/£1916pa/160pm 2017-2021 - mini - cost 11k, sold for 7.5k. Maintenance £0 (5year free bmw service plan) Total £3500/875pa/73pm This has help me overpay my mortgage whilst the rates were an all time low. I now own a 750k house, with a 200k outstanding mortgage, which we will soon extend and add bedrooms and expect it to be worth 1 million by 2025.

[@KevinBerry-c6p]

I did the "Hire Purchase" with sales tax paid up front and 0 percent financing for 36 months at just under sticker price. Someone else might have been able to negotiate a lower price under this arrangement, but I'm happy with the dealership making some money too.

[@neargrog685]

I bought a 7yr old sporty VW Golf outright for £5k. I’ve had it 9yrs & spent approx £4k on maintenance in that time. £9k over 9yrs works out to £83 per month & it’s still going very strong

[@adjusted-bunny]

Nischa, can we get married?

[@abrahamedoghogho1914]

😂

[@davidpopoola7851]

I love the section of the video which discusses the opportunity cost related to each of the options to own the car. Gives a complete perspective for the everyday person living in London or the UK

[@chichicjw]

Fit and well explained. We took out a 17k loan from the bank for our used SUV. Worked out cheaper interest and repayment wise over 4 years and we own it.

[@kaf2303]

Well done for the first 40 years of driving I purchased used cars in cash and maintained them myself. 2 years ago I leased a Nissan Leaf for just under $200/ months & 99.9% of the time charged at home for free with self installed solar. I will probably continue with the latter because I am tired of fixing cars. Cheers

[@FLYBOY123456789]

excellent analysis - leasing is a great option, you can get more for your money, turn it in, get a new one, if in an accident, fix it, and then turn it in...get a new one...your payment stays the same. leasing - always in warranty. furthermore, a car is a depreciating liability...keep you money in the stock market. everybody likes getting a new car...if you drive 10 zillion miles a year, you'll have to buy the car with either cash or finance it. nicely done N. furthermore, negotiate the price of the new car...there's roughly 14% mark up in every car.

[@ballofwax9yards]

Bought a 2005 Corolla and a 2010 Corolla outright , still have both 2023 Nov. Never regretted it. ( inheritance )

[@dalroth10]

I'm not an accountant but have been driving cars for almost 50 years and completely agree with your conclusions. Your explanation and presentation style is very clear and easy to follow. You make a good point about the rising cost of maintenance with petrol and diesel powered cars, but based on evidence now becoming available this doesn't appear to be the case with EV's, which of course have far fewer moving parts. I think your analysis would be worth repeating in a year or so's time, when there will be far more data about EV's on which to calculate the depreciation and residual values. Your final point about financial literacy is so, so true ......... Keep up the good work!😄

[@chrisd725]

One point is that some commenters are mentioning that is not in scope of this video: it does not cover the choices in buying a car and then keeping it for 9 years, vs the other options 3x over. Keeping the car for longer than three years and not having a new car every three years is where the savings really come in. I think a part2 could cover this. I loved the millionaire next door discussion on this. Most finanancially savvy people bought used, but if they bought a new car, then they kept it till it ran out.

[@scottjock]

I bought my E Class Merc at 45.000 miles for £10.000 ten years ago. So far no major bills. It's still like new as I hand wash and dry it every week. I make that £1000 per year. Its now done 130,000 miles. If I get nothing for it I'm still quids in. 😊

[@stephenwatch369]

THANKS Nischa great video information delivery was excellent watched this video a few weeks ago and somehow manifested going into an Audi showroom and purchasing an Audi on Pcp with a 20% deposit to reduce my monthly payments significantly to suit my budget, included tyre & Alloy protection, smart repair, and a service plan.

[@davidcox8838]

I always use HP and have now driven my car for 4 years with no monthly payments. As for maintenance it comes to around £900 a year and over the last four years this equates to £75 a month. I have a very nice BMW and see no reason to replace it. HP keeps you in control. If the car lets you down when you are half way through the term, you can return the car to the finance company without any comeback on you. This might be worth mentioning in your next video about HP contracts.

[@richardlloyd166]

You buy a car on HP but make no monthly repayments????

[@dukafit7981]

I think the most important thing to consider is in not buying new. Waiting so that the large lump of depreciation happens first 3-5 years then buy at actual market price. realistically most cars depreciated 20-50% at that point.

[@adamf.8564]

I would disagree, this depends greatly on the buyer and not on the dealership. It's more important that you don't buy cars that are not in your price range / budget. Cash out is the best way to go about it. Cash only option is the best because then and only then you have the upper hand and at that time you make the decision and not the dealers regardless of brand and models. People are however uneducated. For example, the problem starts where a customer wants a 2024 M3 for 800/month, and realistically, depending on a lot of factors, their monthly is most likely around 1700-2200/ month which for most is unattainable.

[@DG-hq6rc]

factors: - current intrest rates - brand of vehicle and overall reliability. Best method could be vastly different when comparing a toyota VS mercedes

[@karimbulldogs1435]

Quebec consumer laws are amazing for buying a car. The advertised price is the final price unless you haggle down. Just doesn’t include tax and registration.

[@TheCrumbleOne]

In Australia we have novated leasing, whereby it's an agreement with your workplace where the monthly payment comes out of your pre-tax salary. Anyone in Australia should think about this as it includes insurance costs and maintenance and fuel. The downside is that if you were to quit or made redundant (very fashionable ATM), you'd have to pay out the rest of the payments OR your new workplace would have to take on the lease for you.

[@fishpotpete]

I always see these videos about the 3 year lease and the various options during that time frame. But for myself (and most others I know), we routinely keep our vehicle for 7-15 years. We're around 10-12 years ourselves. As soon as you're talking about leases, the only payment option is to making a car payment every single month for the rest of your life. We haven't had a car payment for over 10 years. That needs to be part of this conversation. A car is a poor investment choice for the future - so that's the lesson that needs to taught, or at least addressed. And the used/low miles option should be stressed heavily as well.

[@daddynugent]

I have consistently used PCP to purchase cars, primarily because of the warranty and appeal of a new car, but also because I was only financing the difference between the deposit and balance payment (in my head), and I was therefore able to use my own money elsewhere rather than tying it up in a single large purchase that would be depreciating in value. I recently traded in my car under a PCP which I initially purchased for 43k but managed to get 46K on trade (its GFV was 16k) and I negotiated a good additional discount too off the new car, and got a 3 year service plan included fro free and an extended 5 year warranty as I was purchasing again on a PCP. I do plan to settle the PCP within 18 months to reduce and save on interest payments. It is certainly worth careful consideration as there are many options and it is expensive to purchase & own a car. Your videos are great, thanks for all of the information.

[@MilesNotKilometres]

1. People look at the monthly cost of things, this is why PCP is the most popular. I used to have daily conversations about HP being the better option. 2. Cash will always be the most cost effective, but in some circumstances some peoples investments return more than the interest rate on a new vehicle. 3. Lease is a keeping up with the Jones game and unless it is a BCH I still do not understand why people do this? 4. Suggestion for a future video - 'halves and thirds' rule on PCP - appreciate your videos are education and done as none advisory, but with the hits you get it may help a lot of people in the current climate.

[@steveconnell8730]

Problem I've heard about with leases is that you are limited on mileage. If you go over you meed to pay extra when you return the car Also if you have scratches or small dings, you need to pay for those to be repaired when you return the lease.

[@krasnavin]

I purchased a new car that was previous year model, and got dealer incentive interest rate of 0%. Later I paid off car to improve my monthly cash flow. I drove car for seven years (250,000 miles) with $2,500 total maintenance costs. I plan to buy same car type via loan 36 months @4.9%. I buy only cars that have very high reliability according to Consumer Reports.

[@terencehammond8878]

Excellent well and clearly explained re car financing .PCP is designed to suit one party only ,the dealership selling you the car for the most obvious reasons ,it dictates the price ,the terms, and then ensures another sale in more than 80% of transactions . Your advice to buy a used car is spot on , if you maintain it well and don’t succumb to to the bells and whistles of the latest models you will get the maximum life out of your dearest purchase after your house .