Shall I lease a car or purchase a car? This is a question regularly asked, and one that isn’t generally answered very well.
This needs careful consideration and a real understanding of your situation. Are you looking for a personal vehicle, a company car or a van for all purposes? No matter what you’re after, you have to consider every option before making a final decision.
If you have purchased vehicles in the past, you will definitely be aware of much the vehicle depreciates over time. As soon as you drive your new mini, kia, BMW or any other model out of the car dealership, a £1000 falls away instantly. The majority of cars will have lost at least half of their original value by the time they are 3 years old. This is of course one of the most powerful arguments against buying your own vehicle.
If you choose to lease your car, you’ll not need to worry about the deprecation. With the majority of leasing contracts you will not own the vehicle and will simply hand it back over at the end of term. Of course there are other end of term contracts for you to choose from, these can allow you to purchase the vehicle at the end of the term or even swap it in for a newer model.
There are plenty of benefits to leasing a car. One of the main benefits of leasing is that you can easily budget your motoring costs. Instead of saving for years to buy a vehicle, you will pay whatever deposit you can afford at that time and set up monthly payments. Of course, the more money you initially put forward the lower the monthly costs will be, this means it is entirely in your hands. After two or three years, depending on your preferred plan, you will have no further commitments to the vehicle as the lease ends. In addition to this, businesses will benefit from a dramatic increase in cash flow, VAT relief and tax advantages.
Dealerships tend to offer unique deals to companies that lease several fleet cars. This is great for businesses as costs will be lower and you’ll always have access to the latest makes and models, ultimately promoting a great image for your company.
If you want to go ahead and purchase the car, you will need a lot of money if you’re going to buy a decent one. If or indeed, when you decide to change the vehicle you will only get half or even less of what the car is worth.
If you lease your vehicle you will be able to take the car back to the dealership at any time should something go wrong that wasn’t your fault. This guarantee is incredibly helpful to a lot of drivers that would have normally paid through the roof should they have purchased the car.
Leasing a vehicle is a great way to keep your motoring under observation. You will have a good idea of how many miles you drive a year, you’ll tend to look after the car a lot better and you will not have any surprise bills or routine maintenance.
Note: Overall, leasing appears to be the better option. However, before you go ahead and do anything, you have to make the best decision for you. Weigh up the pros and cons of both, seek help and never make a rash decision.