When it comes to vehicles, there’s a lot to think about. How much do you want to spend on your vehicle? Is buying cheaper than leasing? Will leasing save me money in the short and long term? Nevertheless, cost is just one of the issues you’ll face when deciding on the best option. Below we have highlighted the pros and cons of each to help you make the best decision for you or your business:
There are plenty of reasons as to why you should buy a vehicle instead of leasing a car, however it all comes down to your individual requirements and what you’re using the car for. For instance, if you are using the car for work or commuting then buying will be a big asset to your business because there will be no mileage restrictions or charges. One of the biggest advantages of buying a car, is that you own the vehicle and unlike leasing, you can sell once finished. With a car that you’ve bought there is no need to keep track of maintenance issues, although it’s always good to keep a car in pristine condition – if you don’t then you won’t be penalised for it.
Buying a vehicle might seem like a great option, but there are also some disadvantages to this. You might own the vehicle, but it also means you are stuck with it until you can sell it or have paid it off, which means you’ll miss out on cars with technological advancements. Plus, the value of your car decreases as soon as you drive away. Purchasing a car will normally land you with high interest, a higher down payment and possibly more monthly payments.
Leasing can be a mystery for someone who hasn’t done it before. The upside of leasing a car is that your down payment and monthly payment will be relatively less expensive compared to buying as you are paying for the deprecation of the vehicle not the entire cost. Driving a leased car means you’ll have the most up-to-date vehicle with the latest features and gadgets. Also, when it comes to the end of your lease, you don’t need to worry about a trade-in option, you can simply drop it off and leave it with your dealer.
You might think that leasing could leave you out of pocket. However, there are major tax benefits as VAT registered companies and business can claim back up to 50% of the VAT on the finance element for cars and generally up to 100% for commercials.
Everyone, at some point, will receive a bump or scrape to their car, even if it’s not their fault… However, leasing often offers the option to include a full maintenance package, providing worry-free motoring. This will keep you up to date with a regular service, which includes tyre and oil changes, so you don’t have to fret about those wear and tear charges. Your chosen leasing company will expect the car to be handed back in good condition, at the commencement of your contract you will be given a guide set out by the BVRLA as to what constitutes fair wear and tear, but if the damage goes beyond this then you will be subject to a charge.
As with every option, there are also some downsides. These include mileage limitations, where if you go over your set yearly mileage, you will receive financial penalties, often per mile, it might not seem much, but they can add up!
How do I choose?
Leasing and buying options really do depend on your circumstance and what you’ll be using the car for. If you have the income and down payment to buy a car then you’ll have the privilege of ownership, whereas leasing gives you the flexibility to have a nice new car every couple of years. The most important factors to take into consideration when making your choice is: How many miles do your drive per year? How much have you budgeted? Are you committed to keeping your vehicle in superb condition? Do you have a good enough credit score? Determining these factors should help you decide what’s best for you!
If you still need help deciding then you can look at more pros and cons on our buying and leasing pages. Alternatively, if there’s something we haven’t covered or if you have any questions then please don’t hesitate in getting in touch! You can call us on 01509 767025 or email us at email@example.com
29th of July 2019