Buying and Leasing a Car Compared

Buying and Leasing a Car Compared

Buying and Leasing a Car Compared

Whether you lease or buy a car you are still securing the use of vehicle. As far as the legal niceties are concerned, if you buy a car it will legally belong

to you. If you lease the vehicle it will belong to the contract hire company who leased it out to you. Who actually owns the car may not be all that

important to anyone seeking to acquire a vehicle. The main decision will be based on whether buying the vehicle or leasing is the most cost effective option.

When buying a car it will be yours and you will have the log book. Unless you are paying out on a car loan, there should be no extra costs, other than the usual running costs such as road tax, fuel, insurance and maintenance. If you are leasing the vehicle you will have to put down an initial deposit then pay the monthly leasing costs.

It may appear that buying a car is more advantageous than leasing one. However in reality it is not so straight forward. While someone who has bought his car may actually own it, it will suffer depreciation. For those leasing the vehicle, where the contract hire company maintains ownership, depreciation is not a problem. And once the leasing deal is completed, the car can either be given back or purchased outright.

Unless someone has plenty of ready cash, they are unlikely to be able to regularly change their car, particularly if they like driving new vehicles. For

those leasing cars this is not such a big problem. For those who like to change their cars frequently all they have to do is sign a short term lease, say 12 or 24 months. Once the leasing period has ended they give the vehicle back and than take out another new car on a new leasing deal.

Leasing also offers other perks that may not be available to those actually buying their cars. Road tax for leased cars is often paid for by the contract

hire company. Free roadside recovery may also be on offer.

When deciding whether to buy or lease a car it is important to first sit down and work out the costs of both options. Whichever is most beneficial for you is the one to go for.

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