There have been many great rivalries over the decades: Apple versus Microsoft, Coke versus Pepsi, Nintendo versus Sega. But for those in the market for a new car, car lease vs purchase is the fiercest of all!
The question of whether to lease or purchase a car is a common question on the minds of many – and you’re likely wondering which is the best option for you. Luckily, we have put together a detailed article that pinpoints the pros and cons of both leasing and purchasing a car, allowing you to make an informed decision by the end
Table of Contents
- Is it better to purchase or lease a car?
- Car lease vs purchase: the pros and cons
- Pros and cons of leasing a car
- Pro #1 – Less short-term expense
- Con #1 – Potential long-term costs
- Pro #2 – Can enjoy a new car every few years
- Con #2 – Limited customisation
- Pro #3 – Make the most of warranty coverage
- Con #3 – More expensive insurance
- Pro #4 – No resale worries!
- Con #4 – You do not own the car
- Pro #5 – Tailor the lease to suit your requirements
- Con #5 – You’ll pay the price for not sticking to your agreed conditions
- Pros and cons of purchasing a car?
- Pro #1: You own the vehicle
- Con #1: Depreciation
- Pro #2: Potential long-term savings
- Con #2: Higher initial costs
- Pro #3: Insurance flexibility
- Con #3: Maintenance costs
- Pro #4: Ideal for long-term reliability models
- Con #4: Keeping up with latest technology
- Pro #5: Freedom to sell or trade at any time
- Con #5: Stress of selling
- Allow Motorfinity to guide you in the car lease vs purchase debate
Read on to find out:
- Whether it is better to lease or purchase a car
- The pros and cons of leasing a car
- The pros and cons of purchasing a car
- How Motorfinity can support your decision
Is it better to purchase or lease a car?
Leasing versus financing a car is a crucial decision for most drivers at some point in their lives. And while it may be a difficult one to make, the reality is that there really isn’t a right or wrong decision per se. The question is: is leasing or purchasing a car better for you?
When making this decision, a sensible approach is to look at your personal circumstances and what you want your driving experience to look like. Start by asking yourself tangible questions such as:
- What is my budget for car payments per month?
- Do I want to drive a new car rather than a second-hand one?
- Do I want to avoid the hassle of selling a car?
- How many miles do I drive over a year?
- How important is owning a car to me?
These are only a few to provide initial ideas. Once you’ve written your list of questions and collected the answers, you will be in a better position to decide which option is more suitable and begin to approach a number of dealers and/or leasing companies.
Find out more about the car leasing processCar lease vs purchase: the pros and cons
There are a number of pros and cons to both leasing or purchasing a car that you should factor prior to deciding on committing to either. In this section, we outline the main pros and cons that you should be aware of for each scenario.
Pros and cons of leasing a car
Leasing a car is a viable option for anyone who is looking for a flexible approach to driving a new vehicle on a consistent basis. While there are great benefits to leasing, you should also be aware of potential cons to consider.
Below, we weigh up the pros and cons.
Pro #1 - Less short-term expense
Less short-term expense is usually associated with leasing. This is for two reasons:
- You usually put down a modest upfront payment
- Your fixed monthly payments are generally lower than financing a car as you’re only paying for the car’s depreciation for the term of the lease
However, be aware that the more you pay for the upfront payment, the less you will pay per month!
Con #1 - Potential long-term costs
When you lease a car, you obviously don’t own it. And while this isn’t necessarily a problem if you wish to enjoy the luxuries of driving a new car, leasing means that you’ll always have a car payment – which is avoided when owning a car outright.
Pro #2 - Can enjoy a new car every few years
One of the privileges that leasing offers is the luxury of driving the newest cars on the market. And if you are consistently leasing, you will be enjoying the benefit of experiencing the latest models every 2-5 years.
This means that you will gain access to the latest features associated with:
- Technology
- Safety
- Fuel efficiency
Con #2 - Limited customisation
Although driving a new car has its obvious benefits, you will be confined to what the car offers and its appearance from the outset. While this should be more than enough for you, be aware that you will be unable to modify or personalise the vehicle during your lease. This includes:
- No aftermarket parts
- Additional paintwork
Pro #3 - Make the most of warranty coverage
Most commonly, leased cars are under warranty for the entire duration of a lease. This means that you will be covered for:
- Repairs for manufacturing defects
- Parts and labour for covered components
- Potential roadside assistance
In short, the manufacturer pays for repairs – not you!
Con #3 - More expensive insurance
While you’ll be covered in terms of maintenance, insuring a leased car is your responsibility. And sadly, leased cars tend to be more expensive due to factors such as:
- The leasing company owning the car and will require full comprehensive coverage
- The newest models are generally more expensive to insure
Pro #4 - No resale worries!
Leasing a car takes a stress-free approach when your lease expires. Once it’s time, you can either walk away or lease a brand-new car.
Either way, you don’t need to worry about selling and getting a fair price!
Con #4 - You do not own the car
The obvious con to leasing is that you don’t own the car. However, if you don’t have any intention of owning a vehicle and simply wish to enjoy the benefits of driving in a brand-new car, then leasing is the way to go!
But just remember: your payments go solely towards use - you don’t own the car and likely never will.
Pro #5 - Tailor the lease to suit your requirements
If you decide to lease a car, you can negotiate with the respective leasing company to find a deal that suits your requirements. This can include factors such as the:
- Length of the contract
- Mileage allowance
- Cost of initial payment and monthly payments
With this information to hand, the leasing company will be able to work with you to offer a personalised leasing quotation.
Find out more about car leasing optionsCon #5 - You'll pay the price for not sticking to your agreed conditions
If you do not stick within the confines of your lease agreement, the additional costs can become very expensive. This is commonly the case for the following reasons:
- Exceeding your mileage allowance – which can range from 10p-30p per mile
- Returning the car beyond reasonable wear and tear – including scratches, dents, and stains
- Ending the lease early – which can lead to paying for the remainder of the lease with additional penalty charges
Pros and cons of purchasing a car
Purchasing a car is a sensible option for someone who wants to own a vehicle and potentially use it as a long-term investment. Although there are undoubted benefits to purchasing a car, it’s important to acknowledge that it isn’t the only viable option.
Below, we weigh up the pros and cons.
Pro #1: You own the vehicle
Once you pay off the car – whether it be with a one-off payment or via finance – you will own it outright. This provides you with a number of great benefits such as:
- The ability to keep the car for as long as you like – without the need to make monthly payments
- Being able to modify or customise your car however you see fit
- Selling or trading the car to recover value
Con #1: Depreciation
A key consideration to factor when purchasing a car is that they depreciate quickly. According to Experian, new cars lose an average of 16% in value during their first year and are worth just 45% of their original value by year five.
When you look to sell, brace yourself for potentially bearing a significant loss.
Pro #2: Potential long-term savings
Buying is generally a cheaper option providing you keep the car over the long term – commonly 5 years or more.
Once you finish paying the car off, you won’t need to make any further payments unless you take the decision to purchase another car.
Con #2: Higher initial costs
While purchasing a car can save money over the long term, it’s crucial to be aware that this approach requires larger down payments and higher monthly installments if you opted to finance.
This, alongside the car depreciating from the outset means that you will be hit with higher initial costs.
Pro #3: Insurance flexibility
Leasing companies require fully comprehensive insurance which is associated with higher costs. When you own a car, however, it provides you with more flexible insurance options which reduces costs as your car ages.
Con #3: Maintenance costs
Once the warranty for a new car has expired, this will no longer be covered, meaning that you will be responsible for all repairs. In addition, older cars often require more maintenance which makes life more expensive!
Pro #4: Ideal for long-term reliability models
Purchasing a car can be a wise decision, especially if you invest in a durable car brand such as Lexus, Toyota or Skoda, for example. This type of car generally lasts over 10 years with relatively low maintenance costs – making them an economical choice.
Find out more about our must-have car lease optionsCon #4: Keeping up with latest technology
Cars are constantly advancing. Whether this is new EV models or advanced tech and safety features, the ever-evolving nature of car manufacturing can leave your car feeling potentially outdated sooner rather than later.
Unlike leasing a new car every several years, when you purchase a car, you tend to keep this for a longer period – meaning that you may not experience the latest technology.
Pro #5: Freedom to sell or trade at any time
Unlike leasing, you are not tied into a contract where you must keep the car for a certain timeframe. By purchasing, you have the freedom to sell your car or trade it in for another whenever you want.
And if market conditions are favourable, you can potentially profit from a sale!
Con #5: Stress of selling
Even with the freedom of being able to sell a car, it doesn’t make the process any less stressful! Selling at the right time, potentially haggling on price, and knowing whether you are getting a good price for your car are all potential obstacles to consider.
Allow Motorfinity to guide you in the car lease vs purchase debate
The car lease vs purchase debate can be a headache when deciding which approach is best for you. At Motorfinity, our friendly team of experts are available to talk through our options and guide you in the right direction.
Speak to a member of our team todayRelated Car Reviews and Articles
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