Buying vs. Leasing A Car
You want to get a brand-new car but are a little unsure what’s the best way? Buying and leasing a car both have their advantages and disadvantages – read our informative guide below to determine which is right for you.
Buying vs. Leasing A Car
If you’re unsure whether it’s better to lease or to buy your new car, then have a read of our summary below which details out the main things for you to consider:
Advantages of Leasing
- Most people are eligible to lease.
- It’s a highly affordable way to drive a new car.
- You can drive a new car every 2 to 5 years.
- Leasing’s affordability often allows you to drive a better car than you’d expect.
- You avoid the problems and expenses of ageing cars.
- Initial payments and ongoing instalments often lower vs. buying, helping protect savings.
- Road tax, breakdown cover, MOT are all included.
- You get great reliability as the vehicle is at its best.
- Fixed cost motoring - you know exactly what you’ll be paying out every month.
- There’s no depreciation risks.
- There’s no selling concerns at the end.
Consideration Points for Leasing
- You don’t own the vehicle and have nothing to sell at the end.
- You need to look after your vehicle and make sure it meets guidelines for Fair Wear and Tear.
- You need to stay within your annual mileage to avoid additional charges.
- Early termination can be expensive.
- It can be difficult to lease if your credit rating is extremely poor.
Advantages of Buying
- You own the vehicle, so have something to sell at the end.
- You can treat your vehicle as you wish.
- You can do as much mileage as you wish.
Consideration Points for Buying
- A large deposit or lump sum is often required, which can deplete your savings
- Your new vehicle is a depreciating asset, losing much of its value in the first 2-3 years.
- You’ll need to organise and pay road tax, breakdown recovery and MOT yourself.
- Selling can often be a big hassle and very time consuming.
Is Personal Leasing Right For Me?
Scenarios when a personal car lease may be right:
- If driving a new vehicle is important to you… more important than owning one.
- If you like to change vehicles every 2 to 5 years and enjoy the benefits of ongoing access to the latest models, technology, specifications and safety features.
- If your budget won’t allow you to purchase the car or van you really want… with leasing you may well be able to get a better specification of car or van than if you were purchasing.
- If you don’t want the often larger up-front cost… involved in buying a new vehicle.
- If you don’t want the concern of selling the car or van… when you’ve finished with it.
- If you’d rather not have ownership issues… that come with a depreciating asset.
- If you want to avoid the problems and costs… associated with ageing cars and vans.
Scenarios when a personal lease may not be right for you:
- If owning a car or van is very important to you… in most cases at the end of the lease you hand the car or van back (albeit some finance companies do offer the option to buy).
- If driving a new car or van isn’t important to you… if you’re happy driving an old or second-hand vehicle, or are happy to have the same vehicle for many years.
- If you’re not able to predict your mileage… or if your driving habits are likely to dramatically change, as you’ll need to estimate the mileage you will do in the car or van.
- If you’re not sure how long you’ll need a vehicle… then car or van leasing possibly may not be right as you’ll need to be confident that you’ll need the vehicle for the term of the lease.
- If you don’t feel able to care for the vehicle… or if you’re highly prone to bumps, scratches and accidents or have a high risk of damage, as you’d need to maintain the vehicle to an acceptable standard.
- If you own a business… if you are a business owner (including a limited company, a partnership or a sole trader) then you should consider a business car lease instead.