​Should I Lease Or Buy A Car?

Should I Lease Or Buy A Car?

Having a brand new car on the driveway every few years is certainly an attractive option to most car drivers, and whether you decide to buy or lease a car, you can do that and also benefit from the manufacturer’s warranty and having fixed and affordable monthly payments.

Many prefer the flexibility of changing their car frequently and not being tied down to a car you may soon tire of, so car leasing is a preferable option.

What car lease deal options are there?

Personal Contract Hire (PCH) Finance: This is a straight lease where you return the car at the end of your lease period, and you can then pick up a new car and start a new agreement.

To Buy Or Not To Buy

A major consideration when deciding whether to buy or lease a car is depreciation. The monthly payments for a lease deal take into account everything you have to pay, ie. deposits, depreciation, interest and tax, but you also need to be aware of the residual value, ie. the expected value of the car after a period of time. If the vehicle will lose its value more rapidly, a lease becomes more cost-effective, because you are handing the car back and the residual value is largely irrelevant to you.

Other benefits of car leasing

With some vehicles, leasing companies (like Pink Car Leasing) have sufficient buying power to acquire new models from the manufacturers at big discounts, which they can pass on to you. It also means they can offer more attractive finance deals than a bank would, if you were looking to buy a car that way.

In summary, leasing a new car can be cost effective if you choose the right model and stick to agreement terms and restrictions. You are also free from some repair costs, but significantly from the responsibility of trading or selling the car when you want to change it, and hence depreciation is not a big factor for you. As a lifestyle choice, leasing a car certainly ticks a lot of boxes for those looking for flexibility, manageable payments and less day-to-day obligations, and the figures are showing that more and more people are wanting that.   

Check out our top car leasing deals here.