A common question many drivers have is whether it is better to buy a brand new car or lease one?
Buying and leasing each have their own benefits and potential drawbacks, with personal circumstances and preferences being the deciding factor. Before you decide what you prefer, you need to consider the following:
- Do you want a brand new car every couple of years?
- Is owning the car a key factor for you?
- What will you use the car for?
- How many miles per year will you be driving?
- How much wear and tear is it likely to get? (For example, will the car be used regularly to transport pets, children or heavy equipment?)
We have broken the advantages and disadvantages of leasing and buying a new car below.
Advantages of leasing a car
- Lower monthly payments – straightforward and transparent pricing
- Costs are fixed every month
- Costs such as road tax and breakdown recovery are included in the monthly rental
- Costs such as MOT and maintenance can also be covered as part of the lease
- No depreciation worries
- Only paying for part of the vehicle cost
- Get a brand new car immediately rather than saving up for one – which has its own benefits of better fuel economy and safety features
- Simple delivery to your front door
- If willing to wait, customers can customise a brand new car exactly for their needs
- Hand the car back at the end of the contract - no hassle for customers to sell a used car
- If you are a business you can get positive tax benefits through business contract hire agreements
- No worries about past history
- As it is a new car with zero miles ran, reliability will be a strong factor
Disadvantages of leasing a car
- You don’t own the vehicle
- Wear and tear is your responsibility
- Must be able to pay the monthly repayments
- If you exceed the agreed mileage excessive mileage charges will apply
- It will be difficult to lease if you have a low credit rating
Advantages of buying a new car
- Ownership of vehicle
- Sell the car anytime
- There is no mileage penalty
- The car can be modified if required for business
- No worries about past history
Disadvantages of buying a new car
- Depreciation (new cars lose their value dramatically)
- Higher up-front lump sum payment
- Maintenance costs are your responsibility
- Hassle of selling the used car