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Nationwide Vehicle Contracts provides guidance for young drivers who are unsure whether to buy or lease a car.

As you embark on your first steps behind the wheel, you need to consider whether you're going to buy or lease your first car.

There are numerous benefits and disadvantages to each choice, so you must weigh up both sides and decide which is best suited to you.

In this blog, Nationwide Vehicle Contracts advises young drivers who are unsure whether to buy or lease their car.

Financial Consideration

When choosing between buying and leasing, the most important thing to consider is your finances. Your current financial situation will decide what you can and can't do, as well as guide you towards what car you end up driving.

There are various financial elements to consider, such as:


When you lease a car, you must pay an initial deposit. The total amount varies depending on your choice, but it's normally the equivalent of three, six, or nine monthly payments.

When you buy a car, you've got to pay a down payment, registration fees, road tax, and any other associated costs.


If you lease a car, you make fixed monthly lease payments which are typically lower than loan payments because you're only paying for the vehicle's depreciation rather than the full purchase price.

If you buy a car on finance, you'll pay monthly loan payments that will vary depending on the purchase price, down payment, interest rate, and loan term.  

For more information, check out our Calculating Car Lease Payments guide. 


Both owning and leasing a car involves maintenance costs. However, it's likely you'll save more money through a lease deal. Most leasing companies offer maintenance contracts with their cars, meaning you're covered for common faults.

However, if you own the car, it's your responsibility to ensure the car remains roadworthy. This could mean some pretty expensive maintenance costs along the way.


While not a monthly expense, when you own a car, you'll need to consider its depreciation. It will impact your overall finances if you decide to sell the car in the future, so much be considered in advance.

Flexibility and Freedom

Another thing to consider when choosing between buying and leasing a car is the flexibility and freedom you want. As you are young, you'll likely want to hit the road and explore the world, so ensure you make the right choice.

Leasing a car gives you access to newer models every couple of years, meaning you can upgrade to a new model at the end of your lease term without the hassle of selling or trading your car. You get flexibility with how long your contract is and can choose between a two, three, or four-year deal.

Nationwide Vehicle Contracts offers plenty of car leasing deals for young drivers.

When you buy a car, you have the freedom to customise it according to your preferences and personal style. From personal speaker systems to custom paint jobs, buying a car allows you to impress your friends without having to abide by your finance provider, like when leasing.

Another plus to owning a car is that you don't have to answer to anyone. The car is simply yours, so you can do with it what you please.

Mileage Restrictions 

When it comes to mileage restrictions and usage between buying or leasing a car, there's one main difference you need to consider. 

A car lease agreement comes with mileage limits, which specify the maximum number of miles you can drive annually. If you exceed your mileage limit, you'll be subject to excess mileage charges, which could prove costly.

For more information, check out our Excess Mileage Charges Guide

When you buy a car, there are no mileage restrictions, and you have the freedom to drive the vehicle as much as you want.

Vehicle Depreciation

Although we've touched on this already, vehicle depreciation is that important it needs a whole section! Vehicle depreciation is the decline in the value of a vehicle over time, which typically starts as soon as the car hits the road.

When you lease a car, the leasing company estimates the car's residual value at the end of the contract, which is the vehicle's worth after accounting for depreciation. Your monthly payments are calculated on the difference between the car's initial value and the estimated residual value.

The great thing about car leasing is that you don't have to worry about depreciation costs, as you never come to sell the vehicle.

However, when you buy a car, depreciation costs are central to what car you choose. Some cars depreciate quicker than others, meaning you could be further out of pocket when you come to sell the vehicle.

When buying a car, you'll need to consider whether you will sell the vehicle at the end of your contract or keep it long-term. 

Long Term Plans 

Although it may sound a bit boring, you're just starting on your motoring journey, so you'll need to consider your long-term plans when choosing between buying and leasing, such as:


Evaluate your financial stability and future income prospects. If you have a stable income and want to add a vehicle as an asset, then buying may be a viable option.

However, leasing provides the flexibility required if you anticipate changes in your financial situation, such as a new job. 

It's worth noting that you'll need to have a consistent source of income when leasing so you don't fall behind on your monthly payments. 


Consider your car needs in the future. Are you likely to start a family, change your lifestyle, or change your commuting pattern? If so, leasing can be beneficial because of the flexibility it provides.


Buying a car allows you to own the vehicle, which provides long-term equity and the ability to sell or trade in the car. If you value this, then buying would be better suited to you than leasing. 


In conclusion, deciding between buying and leasing a car for young drivers requires careful consideration of various factors. You'll need to analyse your financial situation, mileage plans, and long-term plans to ensure your choice aligns with your needs.  

Ensure you don't rush into making a decision. We all know its exciting to get on the road as soon as possible, but buying and leasing are long-term commitments and must be thought out thoroughly.

If you're looking for more motoring advice, check out our comprehensive car leasing guides on various topics, such as Young Drivers or UK Road Law

Want to get behind the wheel? Nationwide Vehicle Contracts is one of the UK's largest car leasing brokers. Check out our car leasing deals or call one of our experts on 8345 811 9595 for more information.