Is leasing right for you?

Data from the British Vehicle Renting and Leasing Association (BVRLA) suggests more than 1.3 million vehicles on UK roads are currently leased, showing it to be a popular option for many. But what about yourself? 

We want you to be able to make your own informed decision as to which route to go down for your new car, whether that be a lease or buying outright.

Advantages of leasing a car:

An affordable way to drive a new car or van.

New cars can be expensive, and leasing often allows you to drive a better car than you’d expect due to the monthly cost being fixed, so you know exactly what you’ll be paying each month.

You get to avoid the cost of an ageing car.

New cars are at peak reliability with no hidden issues. Used cars often come with hidden issues that could cost you lots of money over time. With a new car, you don’t have to worry about depreciation or any issues that you would if you had to sell on.

You get tax, breakdown cover and more included.

The road tax (Subject to government changes), and breakdown cover is included in your monthly rentals, while your MOT and servicing can be added in a competitively priced maintenance package, at an extra cost. 

MOT is only required after the first 3 years.

Cars don't need an MOT until they're three years old, so if your leasing deal is shorter than that, you may never need an MOT test.

Tax benefits for a business lease.

Business leasing customers can take advantage of huge tax benefits, claiming back up to 50% of VAT on a car or up to 100% of VAT on commercial vehicles.

Disadvantages of leasing:

You do not own the vehicle

The vehicle would need to be returned at the end of the lease period.

Wear and tear is your responsibility

Stains on seats, damaged alloy wheels, and other damage must be fixed prior to the vehicle being returned (subject to fair wear and tear).

A poor credit history could mean you don’t get approved

Customers with less than optimal credit may risk being declined for a lease. We recommend using services such as Experian before applying.

Mileage matters

If you exceed the mileage set on your leasing contract, excess charges will apply. Our team will share the excess mileage charge before committing to the lease.

Benefits of buying a car

You will own the vehicle

This means you can modify the car and also keep any potential profits when it comes to selling.

You can sell it whenever you like

You can swap and change your car as and when you please, as there is no contract.

Mileage is unlimited

Charges for extra miles do not apply when you own the vehicle, which can be a bonus for those who travel large distances each year however, mileage is still something you need to think about for insurance purposes.

What are the disadvantages of buying a car?

Cars depreciate

Cars will always fluctuate in price, with ownership comes the knowledge that you’re unlikely to make back the money you paid for it.

Costs can be higher

Paying for a new car costs more than a lease would over time, this is excluding the cost of road tax and breakdown cover, which is separate when you own the car, and as the vehicle gets older, the costs will inevitably rise.

Selling isn’t always simple

Companies will often help with selling the car, however, they may take a commission for helping you with the sale. Selling privately opens you up to haggling and time-wasters.

So what is the difference between a lease and purchasing outright?

Business and Personal Contract Hire are the most popular ways of leasing a car. When you lease, you pay an upfront payment, called an initial rental,  and then pay a monthly rental for the agreed term, which is typically over 2 or 3 years, but this can vary. At the end of the agreement, the collection of your vehicle is arranged. In some circumstances, you may be able to extend the agreement.

Buying a car outright, you do have various routes to go down.

• Outright purchase: This means you purchase the vehicle in full and have no monthly payments; you just have to be mindful of other ownership costs, as with any car. 
• Bank loans: A bank loan can be used to pay the full cost of the car; you will need approval for a bank loan and a good credit history. Repayments are made to the bank directly. 
• Hire Purchase (HP): This is a type of finance that spreads the full cost of the car across set monthly payments over an agreed term. At the end of the agreement, you usually pay a very small fee to take ownership of the car. 
• Personal Contract Purchase (PCP): This is another type of finance where you pay a large upfront deposit at the start of the agreement then monthly payments as agreed, however at the end of the agreement you have the option to pay a large balloon payment or you can hand the car back for a newer model or something completely different.