There is no doubt that a luxury car – even a used model – is a big investment potential and when facing the issue of it depreciating rapidly in the first few years, many drivers now think twice about laying down so much money to buy a car.
The alternative is to lease, which can see cheaper monthly payments, not to mention the joy of getting a new car every few years – but both methods of car ownership have their pluses and minuses.
If you are not bothered about actually owning your car then leasing could be a perfect choice, however, buying a car means eventually it will become an asset you can sell on, once the finance is paid off.
There are pros and cons on each side of the argument so here is a quick summary:
Why you should buy a car
The obvious benefit to buying a car is that it’s yours once you have paid off the finance – you own the car without making any further payments on it. You are totally responsible for your own vehicle and you don’t have to worry about any slight damage or wear and tear on it as you do with a lease car.
Owning the car also means you have no limit on the mileage you can do with it – most leases have a mileage limit and you will be charged if you exceed it. If you own your car you have a lot more freedom to drive wherever you choose.
You might also be able to negotiate a better discount deal when you buy a car compared with leasing one, so in the long run, with the bigger discount and time-limited repayments you might end up spending a lot less money over the life of the car.
If you shop around for a good deal for your finance package you should end up paying less interest than you would over the length of time compared with an ongoing lease deal. Also, with a lease car, you will be charged extra for any damage to the car, or any miles which you drive over your agreed limit so there could be extra hidden costs – you wouldn’t get these charges if you own the car.
There are a lot of great resources online where you can start your search for a car to buy, you can check this one here.
Why you should lease a car
New cars lose around half their value in the first few years so owning one seems like a waste of money – why bother taking that risk when you can just lease a car without losing a load of money up front.
If you lease you will be paying monthly long-term however it’s no different to paying a monthly phone bill or monthly rent for a house. It also gives you much more freedom to change your car on a regular basis.
You get to drive a brand new car with all the assets and features without losing lots of money due to depreciation. You often get the maintenance and servicing thrown in so all you need to pay for is insurance and fuel costs.
Leasing means your car is permanently under warranty so no costly repair bills or servicing bills to pay for, making leasing a very attractive option as there will be no unwanted surprise bills to pay for.
It might be cheaper for you to lease a brand new car, compared with buying one outright, so you could be driving a brand new model, complete with all the latest safety features, gadgets, and technology, for a smaller deposit and monthly repayment.
Leasing gives you more flexibility – you can change your car every few years so if your family grows, for example, you can swap for a bigger model, rather than having to face a sale and trying to find a new car to buy.
It might be possible to lease a car through your business or employer so have a look at that as an option as well but bear in mind any tax implications which might be thrown up from leasing a company car rather than buying one of your own, as that could land you with a nasty surprise.
As you can see, there are many things to consider when deciding whether to buy or lease your next car as both options have pros and cons. It all depends on your financial situation and what’s important to you when looking for your next car.
If you are not bothered about actually owning the car, then leasing might work best, however, if you want to know that your car will be fully paid for within a few years then you will be better off looking to buy one of your own. If you are not sure then try talking it through with friends and family to see what experiences they have had on both sides of the car driving coin.