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I cant see why people lease may be its better.
Im interested in why people decide against purchasing rather than paying a deposit (up front fee) then so much per month then walk away after the term with nothing to show for your investment.
 

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I've always bought cars outright. However, with EVs there are uncertainties: will some expensive electronic part need replacing at vast cost?; how much battery capacity remaining in three/four years?; will the latest version have double the range?; will the car have no resale value in a few years time?

With lease and PCP deals it's possible to predict the precise cost of ownership because everything is included except for tyres, insurance and electricity. When that works out at around £225 per month it's hard to come up with a reason not to go for the deal.
 

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We too have always bought our cars outright but when we bought our first Leaf we looked very carefully at the PCP option as we did again on our new Leaf. It is a risk. We know that. But we felt that we had the option to keep the cars well beyond the 3 years and as we are prepared to do that if the resale value is poor we preferred to take that risk.

Anything expensive is likely covered by the warranty so that was not really a factor for us.

The resale value was the only real issue. Having just traded in our Mk1 Leaf for a new Mk2 it is interesting to see how we faired. When we bought the Mk1 back in April 2011 we were offered a GFV (Guaranteed Future Value) of about £10,600. We eventually traded in for £8000 but had we sold privately we might have got about £10,000. So we have not lost out by much, if at all and we have saved the interest on 3 years of finance.

So with this in mine we felt that buying was not such a risk and with buying there are no mileage limits. It is ours... we like that.

PCP does help people get the car they want at a fixed price and so I don't knock PCP or those that prefer to get their car using it. But it just wasn't for us :)
 

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For me it was simple maths. (rough figures)
Purchase outright - say £20,000 less resale / part ex in 3 years of £9,000 = Cost to buy of £11,000.
To Lease - Deposit of £3,000 + 36 x £200 p/m = Cost to lease of £10,200.

If you have £20,000 cash to buy the car then at the end of the term if you buy outright the part ex value of your car is an unknown. If you lease, this is set at the get go and removes any uncertainty from the equation in 3 years time.

Also if you had the cash to purchase outright but leased the car the cash can be sitting in a bank account earning some interest for you (IRO £500 over 3 yrs). Some back of the envolope calculations based on £20k cash in bank less deposit and lease repayments over three years would leave IRO £10.5k in the bank after 3 years opposed to £9k part ex value of car if purchased.

But for many they don't have £20k cash to purchase outright and offset the cost of the lease against fuel savings made.
 

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That all makes sense to me. It makes a lot of assumptions though and to us we didn't feel that there was any certainty that PCP would win out. Then we had the mileage limit and charges if going over. PCP isn't for everyone.

Like I say... it does provide a way to remove some of the uncertainty and if you don't have the cash to buy then it does give you a way to buy a better car than you could otherwise afford and that is where it wins hand-down I suppose but there is no certainty that it will be cheaper. You pays yer money and takes yer choice ;)
 

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The biggest reasons for me are:
- Manufacturers are offering higher guaranteed future values on PCP/lease than people are getting in real life. They are doing this to discount and get cars sold. The impact is that over 2-3 years you will pay a lot more if you buy than if you PCP/lease.
- Real future values are badly impacted by new technologies arriving in the period you own the car, which make it less desirable, or cheaper. This is what happened to Mk1 Leaf - the new one appeared and the used prices plummeted. With EVs at this stage of development it is much more likely to happen than with an equivalent ICE vehicle.
- The impact of battery degradation is still largely unknown. The used EV market may or may not reflect the traditional used ICE market.

As the market matures owning will likely become the cheaper thing to do, but for now it appears the cheapest thing is to let the manufacturer hold the risk.
 

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For all the above reasons, no worries on degradation or depreciation, no servicing costs or breakdown cover plus simple tax calculation to put lease cost down to business.
(And the small interest charges are irrelevant to me as just part of cost calculation.)
 

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Your experience is a very useful comparison. What was the purchase price in April 2011 as that will show us exact monthly cost ?
When we bought the Mk1 back in April 2011 we were offered a GFV (Guaranteed Future Value) of about £10,600. We eventually traded in for £8000 but had we sold privately we might have got about £10,000. So we have not lost out by much, if at all and we have saved the interest on 3 years of finance.
s :)
 

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For us, buying was a no brainer.

1.Calculate annual savings based on expected mileage.
2.Multiply by 5 years, which in our case equals 100,000 miles.
3.Buy a car at the price below the annual savings x5 including cost of extended warranty. In our case ex demo Gen 1 with 3,500 miles.

4. Enjoy driving a free car:).

Can't lose as the car will still have intrinsic value after 5 years, either as a 2nd vehicle or as a used battery and spares source by which time it will be literally paying us to have bought it so any "interest" is ours to spend too.
Just need to avoid paying £7.50 to £15.00 for too many rapid charges;).
 

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I would agree with Fenlander if I felt that the PCP was certain to be the cheaper way. I am not at all convinced. I certainly accept that it might and so I cannot disagree with anyone's decision to go PCP. I suppose it depends on your requirements. If you want to have a fixed cost solution then PCP is a good way to go. If you want the minimum cost solution then it is not so clear and then it depends on how you perceive the market will go.

I also I think that if you intend to keep the car much past the PCP period then buying becomes less of a risk as the future value at, say, 5 years is less risky.

Interest rates are lousy at the moment too so less benefit then from buying outright.
 

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Essentially I agree totally with @fenlander's points.
+1. The residual on the i3 offered by BMW (after 4 years in my case) made a PCH the lowest monthly payment, with very little total benefit of choosing a purchase option. Also, being a one car family and my company car allowance stipulating a car of up to 4 years old only, I have no actual need to own once 4 years are up.

Incidentally, the residual on a like specced i3 increased between when I got my first quote in March, and putting my pawprint down last month. I found this interesting on a car BMW have no trouble shifting.
 

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The strongest case for buying a new EV outright is for business purchases. Low emission vehicles qualify for HMRC's First Year Allowance (FYA) which allows the business to write off the whole cost against profit in year one.
Good shout. This is driving a lot of interest in the Fleet Managers we talk to.
 

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I'd prefer not to sign agreements with banks if it can be avoided as it would be difficult to convince me that the bank was not getting a better deal at my expense. Presumably if you sign up for three years you are then stuck with the vehicle for that time, even if your needs change.
However, I really like the idea of someone else taking the risk on the technology and the thought that I might just be able to scrape enough together every month to drive a Tesla.
 

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Presumably if you sign up for three years you are then stuck with the vehicle for that time, even if your needs change
Not if it's a PCP type deal (in all my experience). You can finish early and pay what's owed on the settlement. If you can sell/trade in your car for more you're quids in, otherwise you'd have to pay the balance of what's owed.

There's also the 50% rule, if you'd paid off half the finance/settlement figure (not sure which it is) you can hand the car back and walk away. It's a bit more complex than that, but that's the crux of the situation.
 

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If someone offered a high mileage pcp I might have been tempted, but limiting me to even 10,000 miles a year makes it an expensive toy, rather than my main mode of transport .....
Even with a change of job, I will be surprised if I do less than 20-25000 miles a year. So for me a purchase outright makes more sense, as I will run it until the repair bills are higher than the value of the car ;)
 
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