Is It Better to Lease or Buy a Car? The Pros and Cons.
So, you’re thinking about getting a new car, but you find yourself asking – is it best to lease a car or purchase a car? There are advantages and disadvantages to both options, depending on your lifestyle, budget, and personal preferences. In this guide, we will weigh up the pros and cons of both leasing and buying.
Car leasing, aka ‘Personal Contract Hire, or ‘PCH’ has gained a lot of popularity over the last few years because of its simplicity. All you have to do is figure out your budget, choose your dream vehicle, and simply pay a set monthly fee throughout the duration of your leasing contract (normally between 2-4 years). You then hand the lease vehicle back at the end of your contract, allowing you to upgrade to the latest model, or a different vehicle entirely, providing a lot of flexibility. Buying a car means you own it outright, however if you have taken out a loan to pay for the vehicle then you will still be paying a set monthly fee. Owning a new vehicle is great, however you are hit with a huge amount of depreciation from the moment you drive the car off the forecourt.
What Are The Advantages of Leasing a Car?
Purchasing a new car outright is not possible for most people, the cost is simply too much, even cheap cars like the Kia Picanto will set you back around £15,000. Leasing allows you to drive a new car every few years with lower upfront costs compared to buying.
Benefits of Car Leasing
✔️ Generally, leasing requires lower upfront costs, and you have the benefit of fixed monthly costs, so you know exactly what you will be paying each month.
✔️ Most drivers can lease a vehicle unless you have a very poor credit rating.
✔️ Leasing allows you to drive a new car with the latest technology every few years.
✔️ Don’t worry about depreciation as you do not own the vehicle.
✔️ Minimal maintenance costs making it an affordable way to drive a brand-new car.
✔️ No selling concerns as you don’t own the vehicle, you just have to hand it back in good condition.
✔️ Potential for tax deductions. Business leasing can provide massive benefits no matter the size of the company.
✔️ No long-term commitments to a vehicle, meaning you can keep up to date with the latest technology.
✔️ Includes road tax and breakdown generally. You also don’t have to worry about MOTs until the vehicle is 3 years old.
✔️ Wide selection of vehicles available for immediate delivery.
What Are The Disadvantages of Leasing a Car?
If you’re not as interested in having a new car with the latest technology every few years, then leasing might not be for you.
Negatives of Car Leasing
❌ You don't own the car at the end of the lease, which means you won't have any equity to apply toward a new vehicle.
❌ There are mileage limits. You will need to stay within your mileage limit to avoid extra charges at the end of your lease.
❌ An ‘Initial Payment’ is required at the beginning of your lease to bring down your monthly payments, however this can be adjusted to suit your needs.
❌ You must keep the car in good condition. Any significant wear and tear might incur additional charges.
❌ It can be harder to lease a vehicle with poor credit history.
❌ There is no option to purchase the vehicle at the end of your contract.
❌ Early termination of your contract can be costly.
Interested in leasing or buying a car? Reach out to our experts at Fleet UK on 02392 245570 or email us at sales@fleetuk.com.
What Are The Advantages of Buying a Car?
Buying a car is more expensive upfront, but if you can deal with the larger outright cost, maintenance costs and depreciation, then buying might be right for you.
Benefits of Buying a Car
✔️ You will own the vehicle, so you can sell it later.
✔️ There are no mileage limits.
✔️ You can treat your vehicle as you wish.
✔️ You can modify your cars appearance (as long as you speak to your insurance)
What Are The Disadvantages of Buying a Car?
Depreciation is a major factor. New cars can lose a significant portion of their value within the first few years of ownership. If you’re interested in staying up to date with the latest technology, then take these points into consideration.
Negatives of Buying a Car
❌ You will have to organise and pay for road tax, breakdown, and MOT.
❌ Large upfront costs can mean a massive hit on your financial situation.
❌ If you take out a loan to purchase your vehicle, you’ll still be paying monthly payments.
❌ Selling a vehicle can often be stressful and time consuming.
❌ Older cars are more likely to break down and require costly repairs.
❌ More expensive cars may exceed your budget, reducing your options.
Should I Lease a Car or Buy a Car?
The decision to lease or buy a car depends on your personal and financial priorities. If you prefer lower upfront costs, enjoy driving new models every few years, and like a hassle-free car experience, leasing may be the best choice. On the other hand, if you can afford the larger upfront cost and value ownership, buying could be the right path for you.
Interested in leasing or buying a car? Reach out to our experts at Fleet UK on 02392 245570 or email us at sales@fleetuk.com.
*Please enquire for further information as points may vary depending on term, manufacturer and/or funders. All information is correct at time of posting.