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Leasing vs Buying

Which is right for you?

Leasing has grown in popularity over the past few years and can offer you the chance of driving a brand new car for a lot less money. But, what are the main differences? The demand for leasing is still on the rise, with the BVRLA reporting at the beginning of last year that personal leasing saw its highest level of growth (14% year on year), with personal contracts now accounting for 1.9 million cars in the UK.

What is leasing?

With leasing, you won't own the vehicle, or pay the full retail price of the brand new car - you'll simply pay a monthly rental towards the vehicle to use it for a set period of time. You won't have to worry about re-selling the vehicle, or depreciation - that's all covered in the cost. You'll just need to keep the car in good condition and hand it back at the end of the contract.

What about buying?

Buying your vehicle outright may seem more straight forward than leasing, especially if it's the method of funding you're used to, or more comfortable with. It also may be more suitable for you if you don't want to commit to a contract longer than 24 months, if your mileage is unpredictable, or if your circumstances or career are likely to change in the near future.

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What are the benefits?

What are the benefits of leasing?

  • Drive a brand new vehicle every 2-4 years
  • Fixed, monthly payments for easy budgeting
  • Maintenance package* can be included, so you don’t have to worry about budgeting for servicing, repairs and breakdown cover.
  • Road tax is included
  • Hassle-free selling; we’ll do it for you and you don't need to worry about depreciation
  • When your contract ends, you can trade the vehicle in for you a new one, or you have the option to buy it

*for an additional fee

What are the benefits of buying?

  • You immediately own the vehicle, so any money made from resale is yours
  • You don’t have to commit to an agreed annual mileage limit
  • Monthly payments will eventually stop when the car has been paid for
  • You're free to modify the vehicle as you please
  • You won’t be charged for wear and tear on the vehicle (although this could impact the resale value)

Maintenance with a lease vehicle

You can add a maintenance package*, which will cover day-to-day maintenance, servicing, repairs and breakdown assistance for the duration of your lease agreement. Vehicle tax is also included, however you will be responsible for insuring the vehicle, unless your agreement is taken out as part of a company car scheme, in which case your employer may provide insurance.

*Additional charges apply.

Maintaining a vehicle you own

Throughout the life of a personal loan or hire purchase agreement, you will be responsible for maintaining, repairing and servicing the vehicle. You won’t need to MOT a new vehicle for the first three years, but will be required to service it regularly (the manufacturer’s manual should recommend the frequency of servicing).

Many new vehicles come with a warranty, but the length and level of coverage will vary by manufacturer. Any maintenance issues that fall outside of this warranty will have to be paid for by you. You will also have to pay vehicle insurance and car tax (if the vehicle emits over 100g/km of CO2).

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