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Car leasing VS Outright Purchase...

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This is a question is see posted so often on business and internet forums: Should I buy or lease my next car..?

 Well, that's a great question.

As much as I'd love to encourage you all to LEASE your next vehicle(remember that I can source amazing deals on cars, vans and 4x4's!) for some people, it might not be the best route for them to take, so I've broken down some of the pros and cons here for you so that you have the information to hand in an easy to understand format...

To make this simple – if you think of car leasing as a vehicle rental scheme, where the monthly payments are fixed, you'll not be far away from the reality of the situation. If you don't have a lump sum available to purchase a car, then leasing is a great way for you to get a quality (depending on what you choose, but I'd always advise you against cars that don't have a great track record) new car. In general, your lease contract will also include your road tax (vehicle excise duty) and a full manufacturer warranty. You also have the option of a maintenance package, leaving you to just pay for your fuel and insurance. You won't need to worry about selling the car when you want a new one either – you just remove your CD's from the glovebox and hand it back, hopefully upgrading yourselves to another new car in its' place.

Let's consider the pro points for leasing your next vehicle:

No huge lump sum to find – many lease agreements have a small deposit required, but others have no deposit required. This amount up to you.
Maintenance costs can be included – as you're only effectively renting the car – any regular servicing costs can be included in the monthly cost. This is optional.
Road Tax costs and warranty are included – making it much easier to stick to a monthly budget, without needed to pay for repairs.
Generally the monthly cost of your lease car would be cheaper than the monthly repayments on a bank loan for the new car, or a dealer finance package.
You don't have to deal with the depreciation of your vehicle, as you're just 'renting' it and handing it back!
It could even be tax efficient if you're using it for business

However, you are limited on the mileage that you can do each year. Don't get me wrong, the car won't come to a spluttering halt if you go over your agreed allowance, but it will incur additional charges, which could be a problem if you're on a budget.

You'll also be charged a fee for major damage to the car – fair wear and tear is acceptable, but if you're not particularly careful with your vehicles, this is something you might want to consider!

So, let's consider the pro points for purchasing your next vehicle –

There is no mileage limit – unless you impose one on yourself!
The car is yours to do with whatever you want – so if you want to modify it, feel free, insurance company permitting, obviously!
You will own the car – this will also mean that you would have something to part exchange for your next vehicle.

I am more than hapy to give impartial advice, or answer any questions, just get in touch!

Winter Driving Tips
80% of new cars sold in the UK in 2016 was a lease...
 

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Friday, 19 July 2019