Buying Vs Leasing Cars - Which Is Best?

Are you trying to figure our which is better for you - buying vs leasing cars? Take a look at our guide to help understand buying vs leasing cars.

If you have ever been in the position of choosing your next new car, I guess you already know of all the agonising decision there are to make. Do you go new or used? What make? And the big one COLOUR! 

So once all these questions have been answered comes the hardest of them all... buying Vs leasing cars - which is best for me? It's a question I can't answer for you I'm afraid, sorry to disappoint! Each and every one of us has different needs and wants in life which will determine the outcome. But that's what makes us interesting - right? 

So, although I can't give you the answer, let me share a couple of the good and bad points of each method. This way buying vs leasing cars will be a little more straightforward decision to make.

Buying a car

Definition - In this instance, we will define buying as in the traditional sense of buying a car i.e. purchasing a new vehicle via your own funds. Not getting a bank loan or any form of car finance.

Good Points Of Buying A Car

Car buying comes with the full manufacturer's warranty, this gives peace of mind most faults will be repaired without any charges

Ownership. The car is yours, in effect it is an asset.

If you are prepared to keep the vehicle for a long time, the total costs of running the car could be cheaper.

No worries about fixing damage done to the car. As you don't need to hand the car back to anyone and incur fees.

Bad Points Of Buying A Car

Depreciation. As soon as the car is driven away from the showroom it will lose money.

Cost of change. If you choose to change cars the cost to do this can be high. Dealerships will typically only offer trade value, which will make the difference between what your car is worth and the cost of the new car bigger than first expected.

Hassle. Selling a car privately is one way to guarantee to return a greater value for your car than part-exchanging at a dealership, but this could take up a lot of your time.

Wear and tear. As the vehicle gets older, more and more mechanical issues tend to arise. The means more trips to the costly mechanic.

Taxing. The vehicle needs to be taxed yearly. Whereas with leasing the tax comes as part of the contract length.

Summary 

If you are happy to keep a car for a long period - say 6 years and longer - buying a car is properly more suited to you than leasing a car would be.

Leasing a car

Definition - For these purposes when we refer to leasing a car this could be a Business Contract Hire, Personal Contract Hire, Personal Contract Purchase or Lease Purchase agreement.

Good Points Of Leasing A Car

Just like buying a new car outright, when leasing the vehicle will have a full manufacturers warranty.

Road Tax Included. Certain lease agreements include road tax for the full contract period. This takes away the hassle of arranging yourself and the cost each year.

Ease of change. One of the major benefits of leasing a car is the ease with which you can change cars. Essentially every two, three or four years (whichever contract period chosen) you will be able to get a brand new car - without having to pay out huge sums of money.

More car for your money. Leasing will allow drivers to have vehicles they would never be able to afford to buy outright, this is because you only pay for the period of use.

Bad Points Of Leasing A Car

Fixed period. Once you agree to the contract period, that is how long you have to keep the car for. To exit a lease agreement early will mean paying a termination fee, on average expect around 50-60% of the remaining instalments.

Contracted mileage. At the start of the car lease, you will have to state the mileage the car is expected to do over the contract period. If this is exceeded there are excess mileage charges, typically these are between 6 - 10 pence per mile. However, most finance companies allow customers to change the contracted mileage midterm. This way you can spread the additional mileage charges.

If the car is damaged during ownership and you hand it back without fixing it, you can be charged fees to have the car repaired.

Summary 

Car buying is worth it if you aim to keep your vehicle for a longer period of time (more than 3 years) and aren't interested in changing often or being stuck with a monthky contract.

Car leasing is great if you want to change vehicles regularly. It allows you to drive a car you perhaps would not be able to afford otherwise and keeps upfront payments to a minimum. I hope this helps answer the questions "buying vs leasing cars - which is best?".

If you have any questions, or just want some straight-talking advice, please feel free to call our team on 0151 728 4711 or visit Stable Vehicle Contracts. If you are considering changing your lease car or van in the near future why not join the thousands of subscribers who already receive our weekly newsletter. Each week we aim to send out a selection of the very best contract hire & leasing offers in the UK!