lease carAre you considering getting a new car?  Should you buy new or second hand? What about leasing?  Already popular in the US, leasing (or personal contract hire) has also taken off here. You are effectively hiring a car long-term, with no option to own the vehicle.  We’ve listed several scenarios to see whether you should buy or lease car your next car.

I like new cars

New car: If you purchase a brand new car then you get to choose what you want however over time your car becomes old and depreciates in value

Lease car: You can have a new car every 3 years and you don’t have the hassle of having buying or selling

Verdict: Lease cars as you can change cars easily and often.

I like to change my mind

New car: If life circumstances change and you need to part with your car, then you can easily sell it and pay off any finance deal you may have had

Lease car: If you like to change your cars every 3 years or so then lease cars are great.  However, if you change your mind about having a lease car halfway through your deal then it could be costly.  Terminating a lease is difficult and there are heavy financial penalties.

Verdict: New car as you will need to think carefully about signing for a lease car as this is only for someone in it for the long-run

I want to own my car

New car: Owning a car doesn’t have to be costly.  You can buy new or second hand.  Whatever you go for, it’s your very own pride and joy.

Lease car: You will never own the car, no matter how long you lease it

Verdict: New car wins. You pay for the car and it is yours.  Also owning your own car is probably cheaper than leasing long term.  Those low monthly lease payments soon rack up and soon overshadow the cost of a car that you own.

I like to pimp my ride

New car: If you like to modify your car and turn it into something to be proud of on the streets of Essex, then go ahead as no-one is going to stop you (although do check the terms and conditions of your car insurance).

 Lease car: If you modify your lease car then you are breaking the terms of the lease. Also if “modification” to the car happened by accident (ie you had a little bump) then you will also be liable for excess wear and tear penalties when you return your car.

Verdict: New car – it’s your car and you can do what you like to it!

I want to pay the same amount each month

New car: You may not need to pay monthly loan repayments if you paid for your car upfront however you will have to pay for unexpected maintenance costs

Lease car: You will be paying fixed low monthly payments and servicing is often included.

Verdict – Lease car wins

Our opinion is that a lease car is handy as a business car but for private use, it is entirely up to the driver.  It is like the arguments for and against renting vs owning your own home, it’s all about personal circumstance.

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