To lease or to buy – Which is right for you?

If you are thinking about buying a new car, you would be wise to consider the possibility of leasing instead. Leasing is becoming increasingly common in the UK, and drivers are really seeing the benefits. There are many companies that offer special offers for car leasing, so it’s always good to get some car leasing tips before committing to a decision. If you’re stuck on choosing between leasing or buying, here are some pros and cons for each option.

The pros of buying

If you are completely inexperienced with using finance on cars or exploring other options, then buying outright may be the only method you know of getting yourself a new car. It is still the most common way for people to get a car, and there are advantages to it:

• It is completely yours – this is the most straightforward, irrefutable way to own a car with no strings attached. The car belongs entirely to you.

• You can sell whenever you want – a benefit to buying is that you can sell whenever you like. If your circumstances change and your car isn’t needed anymore, you can sell.

• You can make modifications – you have complete freedom to make any changes you want to your car.

The cons of buying

Buying does have its disadvantages. Sometimes it isn’t the best option, but the buyer isn’t aware of the alternatives. Some of the following pitfalls can be avoided if you choose to lease instead:

• Higher monthly payments – buying a car on finance will incur large monthly payments. Buying may not be the best way to keep your monthly outgoings down.

• Depreciation is problematic – cars tend to depreciate very quickly and can lose as much as 60% of their original value after just 3 years.

• Selling isn’t always easy – you have to do all the work, including organising viewings and test drives unless you are willing to sell below market value.

The pros of leasing

Car leasing gives you the benefits of owning a brand new car for a short period of time. It allows you to avoid the hassles and costs of outright ownership.

• Monthly payments are low – lease payments are generally lower than when you buy.

• You always drive a new car – driving a new car is fun and leasing will give you one to enjoy for a fixed period before replacing it with another.

• Expensive maintenance costs are minimised – new cars typically incur fewer maintenance expenses, so a leased car is likely to cost next to nothing in terms of maintenance.

The cons of leasing

Leasing isn’t everyone’s best option, so you need to know what you’re committing to. It’s very different to outright ownership, so you need to understand everything fully.

• Poor credit may be an obstacle – a bad credit history may make it impossible to lease a car.

• You are liable for wear and tear – you may incur additional charges when your lease finishes if the vehicle has any wear and tear damage.

• It can be more expensive long-term – if you commit to leasing for many years, it can actually be more expensive than buying.

You should get as much lease advice as possible if you are considering leasing a car. Look for new car deals that will get you the car you want, and compare what will be involved in buying and leasing to learn what will work best for you.