The question of whether it was better to lease or buy your next car used to be a very hotly debated topic. What are the Pros and cons of buying – vs – leasing a car ?
More and more individuals and businesses are turning to leasing, with personal contract hire seeing a huge rise in popularity in recent times.
Obviously, at Rosedale Leasing, we are firm believers in contract hire but at the same time, we feel that it is important for everyone to understand all of the options that are available to them when it comes to vehicle acquisition.
With this in mind, we thought it would be interesting to share some direct comparison buying and leasing pros and cons!
Pros and cons of buying – vs – leasing a car
|Buying Pros||Leasing Pros|
|1. Buying a car is buying into asset ownership||1. Low initial outlay costs|
|2. You can trade-in or sell your car at a later date to buy or lease a new car||2. Low monthly payments compared to loan repayments|
|3. Once you have paid for the car it will belong to you||3. Lease terms can be set in line with manufacturer’s warranties|
|4. There are no mileage restrictions||4. Leasing Maintenance costs are low due to the age of the vehicle and thanks to the latest technologies|
|5. There are no restrictions if you wish to modify your car in any way||5. There are no depreciation worries as the vehicle is simply handed back at the end|
|6. Costs can be claimed as tax deduction for business owners|
|7. Mileage restrictions can be set to suit your requirements and will reflect depreciation accordingly|
|8. You can fix the costs of your motoring at all times|
|9. There is the option of taking out a maintenance agreement, which usually works out very favourably|
|10. Costs of depreciation are factored into your lease agreement and combined with discounts and bonuses that often result in leasing costing less than ownership|
|Buying Cons||Leasing Cons|
|1. Even though your car will be an asset, it will be a depreciating one||1. With every new lease, there may be a new initial payment at the commencement of your next contract which you should budget for (alternatively you can opt for a terminal pause contract which means there is a payment holiday at the end of the agreement that will allow you to save for your next initial payment)|
|2. Costs of depreciation will determine how much your vehicle has actually cost you when you come to sell it / trade it on||2. Excess mileage charges apply if you cover more miles than agreed at the outset|
|3. If you decide to modify your car it could devalue the vehicle||3. Damage charges will apply if your car is not returned in line with fair wear and tear standards – in any event, even with ownership, damage would need to be repaired before reselling or the costs would reduce the value of your vehicle|
|4. Maintenance costs increase over time and as the vehicle gets older this can result in costly – and often unexpected – repair bills|
|5. If you finance your vehicle deposits are usually higher than leasing agreements|
|6. Hire Purchase repayments are higher than lease repayments as you are repaying the capital cost of the vehicle|
|7. If you choose to buy a used car running costs will most certainly be higher than buying a new car|
|8. If you opt for a cheap used vehicle from an unknown dealer or if you decide to buy privately, it can be tricky determining the vehicle’s history|
|9. If you buy a new car, depreciation will be at a higher rate over the first few years|
We do hope that you have found our special feature useful and would love to hear from you on any of your social media channels if you have any more suggestions for buying – vs – leasing pros and cons!