When weighing up the options on whether you should Lease or Buy a Vehicle, there are advantages and disadvantages for both options. Here’s a helpful list of the Pros and Cons for each option to help you make an informed decision.
Leasing
Pros of leasing vehicle:
- Normally a lower monthly payment than taking out a bank loan.
- You have the option of a brand new vehicle every 2 to 4 years.
- Manufacturer warranty is included.
- No trading or selling your vehicle, you simply hand the vehicle back at the end of the contract. Please check our wear and tear guide on leasing before handing your vehicle back.
- Good tax benefits if you lease a car through your Business. See our What Is Business Contract Hire section for more details.
- You have a fixed monthly cost each month for the length of the contract.
- You don’t have to worry about the car depreciating in value as you don’t keep it after the contract is over.
Cons of leasing a vehicle:
- You normally need a good credit history to apply for a lease vehicle.
- You are responsible for all repairs costs if you damage the vehicle outside of acceptable wear and tear.
- You won’t own the car at the end of the contract.
- You must pay all monthly payments and will be tied in until the end of the contract.
- Your annual mileage is limited to your contact, you may need to pay an excess mileage charge if you exceed this. Please see our guide on how yearly mileages and excess mileage charges work.
Buying
Pros of buying a vehicle:
- You have full ownership of the vehicle and may do whatever you wish with it.
- You can choose to sell your vehicle at any time.
- No mileage restrictions or excess mileage charges to pay.
Cons of buying a vehicle:
Leasing can often have lower monthly payments depending on the mileage and term you choose, but you won’t own the vehicle at the end of the term. Buying a vehicle means you have the benefit of full ownership with no mileage restrictions, however you are responsible for trading or selling your vehicle if you would like or need a different car. When buying a new vehicle normally half its value may be lost within the first 3 years.
The choice is ultimately up to you and will depend on your lifestyle and own personal preference and circumstances.
