Should I buy or lease a car? Read our two point guide

When it comes to getting a vehicle, there are several options to choose from these days. You can lease, finance or pay by cash.

But what do these options mean to you, the consumer? Which option is best suited to your needs? There is usually one option that makes more sense for your current situation and for your future plans.

As a leasing company, who value transparency and honesty above everything else, we see it as our job to help you work out which option is right for you.

So in this article, we are going to look at your three options; finance, leasing, and paying in cash, and help you decide which one is best for you.

Buying vs. Leasing; Which is best for me?

Should I finance my vehicle?

Despite the rise in leasing, finance is still the most popular way to get a new car. One of the reasons is it is still the most popular choice because people know how it works, they know what it is and they know the risks involved.

When you finance your vehicle, it is very similar to getting a mortgage. You have your car for a period of time, usually up to five years, while paying monthly payments. These payments are fixed and when the time period is up you own the car with nothing more to pay.

This finance scheme is called a Hire Purchase, and is a very common way of getting a new car.

What are the pros and cons of a Hire Purchase?

There are some huge benefits of a Hire Purchase, for example;

  • You own the vehicle at the end of the agreement
  • You can set the monthly costs so they are affordable
  • The monthly payments are fixed
  • There are no mileage restrictions
  • There are no Fair Wear and Tear restrictions
  • If you have enough cash, you can settle the finance early if you wish
    • You might even get a rebate of interest under the Consumer Credit Act 1974

However, there are some disadvantages. These include;

  • Monthly payments can be higher on a Hire Purchase than on a lease
  • You won’t officially own the vehicle at the end of the contract
  • Because you won’t own it, you will have to pay for fully comprehensive insurance and get it serviced right until the end of the contract.

You can watch a video on Hire Purchase below.

Should I lease my car?

Your other option is leasing a car.

A long time ago, leasing used to be mainly for businesses. However, leasing has grown in popularity and in recent years, has become even more popular than it ever has been.

While getting a car on a finance scheme is like getting a mortgage, leasing a car is more like renting. When you lease a car, you have the vehicle for a certain amount of time. While you have the car, you pay fixed monthly payments, agree to a set mileage and agree to keep the car in a good condition.

Once that time is up, you hand the car back. As long as you have kept your mileage in check and the car in good condition, you will have nothing else to pay and you simply get a brand new car.

What are the pros and cons of leasing?

There are some benefits and downsides to leasing. Some of the benefits include;

  • You get a new car every few years
    • You can get a brand new car with the latest technology, safety equipment and latest stylings every few years, without having to dispose of your current vehicle
  • You don’t have to worry about depreciation
    • Because you don’t own the car and aren’t responsible for disposing of the vehicle, you don’t have to worry about losing money when it comes to reselling.
  • The monthly payments are often less than if you got the vehicle on finance
    • This is because you aren’t paying for the whole price of the car, you are simply paying for the depreciation
  • The monthly payments are fixed

However, there are some downsides;

  • You don’t own the car
    • For some, the satisfaction of owning their car is enough for them to decide that leasing isn’t for them
  • You are limited to a set mileage
    • This is because you are paying for the depreciation, and mileage hugely affects the depreciation. If you go over the mileage, then the car will be worth less. So if you go over your pre-agreed mileage then you will have to pay a fee
  • You will also have to keep the vehicle in a good condition
    • This is in line with the BVRLA Fair Wear and Tear Guide. Your car will be inspected on return and if it is not in a condition that is in line with the guidelines then you will face a charge.

Should I buy my car with cash?

Another option is buying your car with cash. This is exactly what it says on the tin. If you have enough money in the bank then you can always buy your car with cash. There are no monthly payments, no pre-agreed mileage, no deposit. This is the perfect choice for those who have the money in the bank and don’t want to be attached to a finance or lease scheme.

What are the pros and cons of a cash purchase?

Here are some of the advantages of a cash purchase;

  • You own the vehicle outright
  • You aren’t tied to any monthly payments
  • The insurance is sometimes cheaper
    • This is because you don’t have to get third party


However, there are some disadvantages;

  • You are responsible for getting rid of the vehicle should you want to buy another one
  • You own a depreciating asset
  • It can be expensive
    • Cars are expensive to buy outright these days

Is there another way to pay by cash?

If you don’t have the money outright and you don’t want to get a finance agreement, then you can always looking at getting a loan from the bank. If you get a loan from the bank then you borrow the amount the car costs. You buy the vehicle outright and you then pay your loan back to the bank. It’s similar to a Hire Purchase but instead of paying the finance house you pay the bank. And you already own the vehicle.

There are two different types of loan you can choose from; a secured loan and an unsecured loan. A secured loan is where you put something down as a type of security. This is called collateral and is usually the most expensive thing you own. In this case, it could be your car. If you miss a payment then the bank will take this piece of collateral. The other type of loan is called an unsecured loan, this is where the lender approves your loan based on your credit score and you don’t have to put collateral down.

Ready to buy, lease or finance a new car?

You could be driving away with your new car in no time. Fill in your details below and one of our vehicle experts will be in touch within one working day.

Fed up with looking for your next vehicle?

Need advice from an experienced Vehicle Specialist on what vehicle is right for you?

Book your FREE consultation now