Is Leasing CHEAPER Than Buying? 2023 Data REVEALED!

Here's a question for you: Leasing a car is a bad idea. Well, if you listen to conventional uninformed logic, then it's not necessarily the most financially responsible thing to do. People say that

leasing

, which is basically renting a car for an extended period, is only for people who want to throw away their money or show off cars they can't actually afford, but it's a lot of fun if that's your point of view. I hear you, but I'm not so sure. I agree at least not always because

leasing

if done right can actually be the cheapest way to use a new car, let me break it down first.

I have to tell you that I will not give you financial advice. Talk to your mom, your dad or your accountant about that. but I'm about to explain some

data

that I have thanks to AutoTrader and we know pretty much everything when it comes to car

data

. We give you the tools to buy, sell and lease cars so we know how much one costs compared to the other. I really want to share those numbers with you so you can make the right decision. Well, then what is leasing? It's basically long-term rental and generally applies only to new cars.

You pay an initial rent which is a bit like a deposit, except you. you don't get it back and then you pay a monthly rental fee for 24, 36 or 48 months, in return you get a shiny new car that you can use up to 20,000 miles a year and at the end of the lease period they will give it back to you. come and take the car, at which point you can choose to order a new one or not. At first glance it seems like you are wasting a lot of money, although imagine renting an Audi A3 and paying almost 500 pounds a month for 36 months, that is 18 thousand dollars to use a car that at the end of those three years you pay back what, but Things aren't always as simple as they seem, here's the thing: Buying a car with cash is fine, maybe you'll buy a car. for £18,000 and you keep it for the rest of your life or rather the rest of its life a conventional car will last 200,000 miles if you maintain it well, maybe even 300,000 miles in the UK the average distance we drive each year it's about seven and a half thousand miles, if you last until The Bitter End doing that many miles you could keep a car for about 40 years, but let's face it, people don't keep their cars for 40 years if they did. everyone would drive cars made in 1983 and I'm sure you don't drive a car made in 1983, at least not on a daily basis, of the almost half a million cars for sale on auto trader there were only about 500 made between 1960 and 1980.

People don't keep their cars for long, in fact, according to our data, the average car on AutoTrader is bought and then sold every three years and four months, and what happens when that period ends. and you want to get rid of the car, you sell it well, but if you spent, say, 30 grand on a car when it was new and then you sell it after three years and four months, you're not going to get that 30 grand back, right? and that's because there's something called depreciation, which is a reduction in the value of a car over time due to wear and tear.

As soon as you buy a new car it becomes an old car and no one wants to buy an old car for the price of a new car after three years and four months that car could have lost up to 50% of its value a 30 year old car It could be worth fifteen thousand pounds which means that in three years or so you have lost fifteen thousand pounds for the privilege of using the car for three years, that's 416 pounds a month, so the question I have is: would it have been better to lease a car for £416 a month instead of spending thirty thousand pounds on it up front?

Let's break it down with some concrete examples as I have said that Auto Trader allows you to buy new cars, used cars and also lease. We give you the options and all we care about is that you do what is best for you, but the good thing is that we have the data that we can tell you if you rent. or

buying

might be better for a specific car on our platform, there are a few things to consider when trying to determine if leasing is better than

buying

cash, firstly, the total price of the car to buy, depreciation, that is, how much it costs . you lose over time and the future trade valuation, which is about how much you can sell that depreciated car when you're done with it and this is what you need to consider before you take out a lease, the down payment, which is what you pay up front. the monthly rents, that's what you pay each month for the duration of the lease and the total cost of the lease, that's all added up.

What I'm going to do now is compare buying versus leasing some specific cars taking into account everything I just mentioned and we'll do it for the default lease period of 36 months with six months down payment and an allowance of 8,000 miles a year, which is what most people do. Let's start with one of the most popular cars in the UK. the Nissan Qashqai specifically the 1.3 drgt mhev We've also calculated the future market value of this car, which is remember how much you can reasonably expect to sell it privately after three years, i.e. £15,205. The total cash cost, which is the difference between what you paid for it when it was new and what you can sell it for after 36 months, is £14,214 - that's what I've lost by buying that car new and selling it after 36 months and, by the way, the longer you keep it, the more it loses value.

How does that compare to leasing longer than 36 months? Well we'll use the most common lease terms for a cash employee on our site which is £343 a month, you pay six months of that up front and then 35 subsequent monthly payments of the same amount over the entire lease period and For this cash employee the total cost of the lease when added The down payment and the remainder of the monthly payments are £14,081. Interesting, isn't it? If you bought the cash, you would have lost 14,214 after three years, but as we just saw, if you rented the car and then traded it in.

Pay it back after three years, you would have paid a total of £14,081, making leasing over the same three-year period £132

cheaper

than buying as the cash keeper and you don't have to save or save 29 and a £500,000 cash in the process you simply keep your money and pay in instalments. We'll look at a couple more examples in a second, but I just want to reiterate that I'm not giving anyone financial advice. Please don't take this as gospel, okay, talk to someone who knows about money. I'm just giving you my side of the story. Do the math yourself. I should also note that this video is not intended for people who prefer to buy used cars.

I'm here. I'm talking exclusively to people who want to find the best way to get into a new car. That said, let's work on another example, let's do North Star two, first of all, here's the list price, the price of buying it new, forty-five thousand. four hundred and fifty pounds the future market value again the price you could reasonably expect to sell it for after three years of depreciation £21,823 and that gives you a total cost the difference between the new list price and the price you sell it for of 23 £627, that's what you lose, what would happen if you leased the car?

Well, the monthly price for a North Star 2 lease on Auto Trader is £566 98p on the terms I mentioned above if you pay six months' initial rent. the first month and that same figure every month for the rest of the rental period. So the total cost of the lease is £23,246 18p. If you bought this car new and then sold it again after three years, you would lose £23,627 the cost of leasing the car twenty-three thousand two hundred and forty-six pounds in other words, leasing North Star 2 You are going to save £380 and in no time You'll have to shell out £45,000 before someone gives you the keys, okay, it's fair to say that you won't be better off leasing all the cars rather than buying them.

Some cars depreciate more than others over the time you own them. Hell, some cars even go up in value, it's very rare, but that's what it is. This happens, let me give you an example of the car with good depreciation, the Porsche 911. This costs £105,699 after three years. If you sell it you get back £66,780 which is a loss of £38,000, but if you lease one from us make a down payment of £11,291 followed by £1,881 each month for a total lease cost of $77k. The difference between buying it and then selling it at a total cost of thirty-eight thousand nine hundred and nineteen pounds versus a total lease cost of £77,000 is more than 38.

Great, you're better off buying the Porsche anyway. Let's end with a great example of a car where if you don't lease it, you're literally setting your money on fire again. It is not financial advice. I'm just giving you my opinion, the 3 liter Audi A8. TDI V6 50 black edition, this one costs £82,000 after three years of driving it due to depreciation, you can sell it back for thirty four thousand pounds, so in three years you have lost £47,700, if you lease it you pay £876 pounds. one month with a total leasing cost of thirty-five thousand nine hundred and twenty-three pounds the difference between buying and leasing is almost 12,000 pounds over three years in favor of leasing, something to think about personally, what do I do?

I buy some cars I rent others it just depends on the individual deal I bought my Ford Mustang for cash at least my BMW X5 and I leased my Tesla model and I'm not telling you what to do with those specific cars, I'm telling you what I did with them, right ? and that you can also save money with leasing if you get the deal right and obviously there are pros and cons. The advantages include the fact that you can get a new car every few years and you may not have to worry about maintenance, you also have a car. that's under warranty all the time, you can try a lot of different cars instead of sticking with one for the rest of eternity and you don't have to worry about depreciation, but there are also disadvantages, the mileage you can do is limited.

You do not modify the leased car and they charge you for the damages when you return it in balance. I wouldn't say leasing is definitely better, but it can save you hundreds of thousands, even tens of thousands. It's definitely worth thinking about and on that topic if you're interested in leasing a car, check out autotrader.com UK for the latest deals. I also put a link below to my top 10 lease deals in the description box, the ones I would personally lease instead of buy, but of course. Whether you are buying, selling or leasing, Auto Trader can help you do it all;

We'll even give you an instant cash offer on your used car so you can put it toward the cost of a new one. I should also point out that the same The best way to get a new car if you're really lucky is to win a free one in our monthly electric car giveaway. We give away a new electric car every month because we're nice, I guess check the link. below for more details, okay guys, hope this was helpful. I hope it was insightful. Let me know in the comments if you found it useful and if you found it interesting.

Hit the like button and subscribe. See you soon.