Silverous
Member Since: 31 Dec 2011
Location: Milton keynes
Posts: 8
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Hi,
I have had some discussions that suggest most "premium" vehicles are purchased via a lease. This surprised me as I had thought that if you had sufficient cash to buy such a thing you'd do exactly that (as a rule).
My thinking has always been to purchase outright and I've been lucky enough to have the cash to do so. My thinking has always been, for example, if you have a 50k car and it loses 50% after 3 years - I may as well pay that in cash than to pay a premium on that for someone else to put up the cash? If interest rates and returns on investments are fairly low then alternative uses for the same cash doesn't seem a great argument.
Would love to hear how other people view this. I must admit a cost to change of 36k+ for us would be the most cash I'd outlayed on a car which is making me think twice about this conundrum.
Thanks
Silverous
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 9th Jan 2012 10:21 am |
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DG
Site Moderator
Member Since: 12 Dec 2005
Location: The Gaff
Posts: 50949
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Was it Warren Buffet who said 'buy things that appreciate ...hire or lease things that depreciate' ?  21 year LR veteran > D2 GS 2003 > D3 S 2006 > D3 HSE 2009 > D4 HSE 2013 > D4 HSE 2015 > D5 HSE 2018 > DS HSE R-Dynamic P300e 2021
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| 9th Jan 2012 10:26 am |
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Hairy Dan
Member Since: 19 Jan 2011
Location: Co. Durham
Posts: 12319
 
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No it was Getty  Cheers Ian
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Club N.E.R.D.S
Kielder 4x4 Safari
Discoless
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| 9th Jan 2012 10:40 am |
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kingofthesparks
Member Since: 02 Jun 2011
Location: Near Northampton m1 Watford gap
Posts: 429
 
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DG wrote:Was it Warren Buffet who said 'buy things that appreciate ...hire or lease things that depreciate' ?
Works well if its a business purchase
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| 9th Jan 2012 10:57 am |
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DG
Site Moderator
Member Since: 12 Dec 2005
Location: The Gaff
Posts: 50949
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Ah ..knew it was someone from the mega cash ilk  21 year LR veteran > D2 GS 2003 > D3 S 2006 > D3 HSE 2009 > D4 HSE 2013 > D4 HSE 2015 > D5 HSE 2018 > DS HSE R-Dynamic P300e 2021
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| 9th Jan 2012 10:57 am |
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Silverous
Member Since: 31 Dec 2011
Location: Milton keynes
Posts: 8
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I'd heard it quoted as buffett....by someone who likes to lease.
But surely it does only make sense if you have something worthwhile to do with a cash that can make you more money than you lose in paying the profit of the lessor?
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| 9th Jan 2012 1:09 pm |
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Bodsy
Site Sponsor
Member Since: 06 Nov 2006
Location: In the Clubhouse
Posts: 21361
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silverous, I think you've just summed it up perfectly  Bodsys Brake Bible
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See It Here
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| 9th Jan 2012 1:11 pm |
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Silverous
Member Since: 31 Dec 2011
Location: Milton keynes
Posts: 8
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Thanks. I guess if you look at it and there is a "cost" associated with a lease over cash, but you want to have the use of the cash for other things (which don't necessarily make good returns) then you are basically accepting that there is a cost associated in effectively doubling what you have (50k in the bank and a 50k car).
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| 9th Jan 2012 1:20 pm |
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mark the spark
Member Since: 22 Jun 2011
Location: southampton
Posts: 2477
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The one thing that you may not be aware of at the start of the lease is that if an unexpected event happens to you wherby your unable to work etc and therefore then make the payments you are still committed to the term or pay a hefty get out early clause. i used to lease but in these uncertain times would be reluctant to do so again.
the other thing for me was although a bit illogical leasing never felt as satisfying as getting to the end of a payment plan and actually owning something outright even if it was usually a high mileage ageing pile of crap by that time  MY05 SE D3 Manual my first LR what a car
MY10 HSE D4 auto
MY14 XXV more buttons than the spaceshuttle
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| 9th Jan 2012 2:12 pm |
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crews control
Member Since: 18 Mar 2007
Location: Dorset
Posts: 5011
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If you think interest rates are going to go up... borrow money... because money will be cheaper today than it is tomorrow. If you think interest rates are going to go down... lend money... because money will earn more today than it will tomorrow.
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| 9th Jan 2012 5:21 pm |
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DigitalJunior
Member Since: 22 Nov 2008
Location: Cumbria
Posts: 4399
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Unnecessary quote removed
And what do you do if nobody knows ?? SOLD - 23my Range Rover Sport D300 Dynamic SE
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| 9th Jan 2012 5:28 pm |
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stew 46
Member Since: 01 Dec 2011
Location: cornwall
Posts: 10146
 
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hi , a lot of my felow builder mates lease fancy pickups and VW vans and iv allways said ill by mine outright , thay might be 4 to 5 years old when i get them as is my D3 but now some of them have gone quiet there finding it hard , i no with my vans and gigger and dumper if i go quiet i can sell it , so i neve hhave that worry. -------------------------------------------------
if you cant hold on dont let go , it ill come in handy for something even if you never use it.
D3 SE 05,
110 s wagon 300 tdi SOLD
h top transit
crew cab transit
transit connect
ausa dumper, muck truck .
peljob 2.5 digger
06 L 200 crew cab
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| 9th Jan 2012 7:18 pm |
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pom
Member Since: 10 Feb 2008
Location: Worcestershire
Posts: 1790
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they lease (or more probably contract hire) as this is off the balance sheet and you can claim 100% of the cost, inc vat and fuel out of the company.
your buying yours out of post tax income which is a hell of a lot more expensive. No self employed person wants to earn more than their tax code in income ever!!
Pom
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| 9th Jan 2012 7:40 pm |
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stew 46
Member Since: 01 Dec 2011
Location: cornwall
Posts: 10146
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iv allways done it this way just what iv got used to i suppose , i dont think id feel right with a new van ect , silly because weve never been out of work for 30 years , touch wood , and the next 12 months are fully booked .
but i see what your saying . -------------------------------------------------
if you cant hold on dont let go , it ill come in handy for something even if you never use it.
D3 SE 05,
110 s wagon 300 tdi SOLD
h top transit
crew cab transit
transit connect
ausa dumper, muck truck .
peljob 2.5 digger
06 L 200 crew cab
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| 9th Jan 2012 7:52 pm |
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pom
Member Since: 10 Feb 2008
Location: Worcestershire
Posts: 1790
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stew ask your accountant pronto, you could potentially be saving quite a few quid of your hard earned.
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| 9th Jan 2012 8:02 pm |
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