Should you lease or buy a car?

0

> Can modify without permission > Big initial outlay Leasing is often the cheapest way to get a new car on your driveway. When you buy a car with cash or with a bank loan, the car is yours. Both leasing and PCP, but not HP, will restrict the number of miles you can cover.

> Best manufacturer deals based on finance Pay an initial payment and your fixed monthly instalments and before you know it, it’s time for the finance company to pick up the car. > Not all car manufacturers offer leasing You own the car right away. Car makers offer all sorts of enticing options if you take out finance with them. You can find leasing deals on petrol, diesel, hybrid, and electric cars.

If you want to own a car, the best deals for both PCP and HP mostly come directly from manufacturers. Don’t think leasing restricts what type of car you can buy though. When you’ve paid off your contract, you own the car. Buying a car outright is more complex. > Can sell the car if you need money In most cases, the monthly payment is cheaper than a PCP agreement payment, a bank loan, or a Hire Purchase (HP) agreement because you’re just renting the car.

> Can cost much more to cancel compared with PCP Take out agreement, pay it back, simple. If you’ve paid more than half of the total balance on a PCP deal, you can simply end your contract by handing the keys back with nothing more to pay. > Usually the cheapest way to drive a new car Most car firms want your money in house as it’s easy to keep tabs on you, and even easier to get you back in the doors of showrooms once the deals are done. Buying cons: Deposit contributions are also offered – this in essence is cash money off the deposit of the car. Keep scrolling for a more in-depth look.

> Fixed monthly payments > Strict mileage limits and wear and tear charges > No new car every few years Buying pros: > Road tax and roadside assistance often included Assuming you’re not buying a car in cash, there are three main types of finance you can use to buy a car. Whereas PCP and HP are more per month, but can work out cheaper in the long-run. Leasing – the leasing company owns the car. Cash – your cash, your car. HP – the manufacturer owns the car until you pay your last payment.

So car finance deals come with limits in place to protect the car’s value. With leasing, you commit to not buying. These typically range from 6,000-12,000 miles.

Personal Contract Purchase (PCP) is the most popular car-specific type of finance. PCP deals allow you to wait around and figure out what you want to do until that final payment is due, while with HP, you commit to buying. Is it better to lease or buy a car? Leasing deals offer the lowest monthly payments.

Leasing cons: > Depreciation When you finance a car you don’t own the car (yet). > No annual mileage limits > Makes desirable cars more affordable > Often better value long term There are no additional fees to pay. Damage fees also apply.

If you pay the optional final payment (often referred to as the balloon payment), it becomes yours. Cancelling a leasing contract is much harder than cancelling a PCP deal. If you want the lowest monthly payments and a contract with the lowest number of months, but don’t strictly care about the best value over time, leasing is most likely best for you. Hire Purchase (HP) allows you to split the cost of a car into a deposit and a series of monthly payments.

> While you can sell, you may lose out on money PCP – the manufacturer owns the car. > Can’t modify car > Servicing, maintenance, and insurance can be thrown in 0% APR deals are common. These companies tend to bulk buy cars from manufacturers and lease them out to customers.

> Effectively rental – no option to own With these, you only pay the sticker price of the car with no interest rates. > No damage fees Leasing, often called Personal Contract Hire (PCH) Nissan cube 2011 in kenya, works much like a long-term rental.

Should you lease or buy a car?

<

p>Lease or buy a car Ownership itself is pretty easy to understand. This explains why if you’re looking for leasing deals online, you’ll come across a lot of leasing companies. Leasing pros: First up – the bank loan. You usually pay a deposit (although no-deposit deals are out there), cough up the monthly instalments, then you have the choice to buy the car outright at the end or not.

You’ll get charged a fee for every mile you do over that, typically less than 10p per mile. With leasing deals, you typically have to pay the monthly costs in full if you need to return the car early, though in some cases you may be able to negotiate a reduced cost if you encounter financial problems or the car is no longer suitable. In short, if you want what is likely to be the best-value deal in the long term, and you don’t mind keeping one car for quite a few years, buying is best. Bank loan – you own the car and you pay the bank back.

Is leasing a car worth it? Most manufacturers offer cars with a leasing agreement nowadays, but some still don’t.