Leasing vs Buying a Car

Should I lease or buy a car? Now, that’s the £64,000 question – especially if you’re staring at the list price of a brand-new BMW X5. But you don’t need to find a huge wedge of cash down the back the sofa to snag yourself a fresh set of wheels. Not anymore, at least – not when there are alternatives that mean you can lease or buy a car for a fraction of the initial outlay.

The fact is that more people are turning to leasing. British Vehicle Rental & Leasing Association stats for Q3 2019 show a 17 per cent growth in the UK personal contract hire (PCH) market.

To lease or buy a new car: What are your options?

Now, we’re all au fait with setting up direct debits for this, that and everything – Netflix, gym, monthly cheese club and the rest. More of us are now renting our homes too. So, why should getting a brand-new car be any different? For a regular-as-clockwork payment each month, we’re here to help you get the nice new ride that you thought was out of your price range.

So, does that settle the debate of leasing vs buying a car? Well, not exactly. As with everything finance, there is no one-size-fits-all approach. In fact, it’s like getting a new car too.

Coincidence?

You can get a personal loan to buy a car outright or you can choose personal contract purchase (PCP). PCP works much like one of our PCH leasing deals: down goes an initial deposit, followed by payments each month. At the end of that agreement, you have an option to take the car to have and to hold. If that’s what you want to do.

What difference does it make if you lease or buy a car?

And, perhaps, that’s one of the key questions you need to ask when it comes to whether you should lease or buy a car. Of course, it isn’t black and white. So, here are the ups and downs that should make it much clearer to work out if it’s better to lease or buy a car:

✔	✖
Fixed, predictable payments: You know exactly what you’ll be paying every month – including the initial payment. Oh. Our rates include VAT too. How good is that? Like, literally no gross/net faffing.	No option to own: Leasing is effectively a long-term rental option. At no point will you ever get to own your car. Once the 24, 36 or 48 months is up, it’s time to give it back and find a nice new shiny ride.
More cars, more affordable: Got a dream car in mind? It just became more affordable with our wonderfully workable payments. If it fits in with your monthly outgoings, you have the cream of the crop to choose from.	Mileage limits: Depending on your agreement, you’re free to drive 500 miles – but you might not want to drive 500 more. Exceeding mileage will mean you’ll have to pay extra, but you’re in charge of setting the limit so you’ll always know where you stand.
Lower initial payments than PCP: PCP agreements typically means putting down a sizeable deposit to get started. By leasing from us, there’s no need to find that lump sum to get yourself a new car.	Higher cancellation costs: Hopefully you’ve picked your dream car and you’re happy with it. But if you do want to end your PCH agreement early, we could ask you to pay 40% of what is left. If you break the terms of your agreement, this is likely to cost you even more.
And lower monthly payments: PCPs can get you to pay more each month to build up ‘equity’ over the course of your agreement. But PCH doesn’t. That means lower monthly payments – and more spare cash – for you. PCH can also be much more affordable than repayments on a bank loan you take out to cover the outright cost of buying a new car.	Set schedule: You need to stick to your monthly payments for the whole term to avoid any penalties or losing your car. PCH is best suited to those who are pretty sure their income will remain the same.
Depreciation? What depreciation? Lease from us and you won’t need to worry about how much value your car is losing. In fact, your monthly payments are worked out based on the future value of your car.	Damaged car, damaged finances: Any damage that isn’t considered normal wear and tear can result in extra charges. It applies to inside as much as the outside. But a little bit of TLC should see you right.
Simple and stress-free: It’s a busy world out there and we don’t need anything being complicated more than it has to be. Leasing is as simple as paying every month, handing the car back and going again. Easy.	Insurance: When leasing a car, you’ll have to get fully comprehensive insurance under the terms of your agreement. To be fair, it’s a good idea to do so anyway for the total peace of mind it provides.
Road tax included: Exactly what it says on the tin. We’ll deal with the DVLA on road tax matters. One less bit of life admin isn’t it?	Write-off woes: You may have to pay the difference if your car is written off and your insurer’s value doesn’t match ours.
Maintenance add-on: Who wouldn’t want yet more boring admin taken off their plate? Our maintenance package does just that. For a bit extra each month, we cover things like servicing, breakdowns and new tyres.	Higher spec, higher cost: Getting a brand-new car with all the mod cons could cost you more if it isn’t the standard spec. We’ll show you exactly what each extra adds to your overall cost for full transparency.
Manufacturer warranty: It’s a brand-new car so it’ll be covered by the manufacturer’s original warranty if something goes wrong.	Going abroad: Before you set off on your grand European tour, you’ll need us to say it’s A-OK et bon voyage in writing to do so. We don’t want to be sticks in the mud. But you won’t have the registration docs if the local Carabinieri ask to see them. It’s highly unlikely. But it could be an issue.
Delivered to your door: We’ll deliver your new car to you, so you can sit tight at home. You have to leave the sofa to drive it though.

So, is it better to lease or buy a car?

So, there’s much to weigh up when wondering "should I lease or buy a car?". It ultimately comes down to the way you like to live your life – and your personal circumstances.

If comparatively low monthly payments on a wide range of shiny new cars sounds good to you, leasing could well be the choice for you. Sure, you don’t get to keep the car at the end of your agreement. But you do get the chance to go bigger and better than before with a newer motor.

And it doesn’t put a big chunk of debt against your name before the key’s even in the ignition.

Of course, it’s no different to other finance products in that you have to be sure you can afford your payments for the duration. If you can’t be sure that your income or circumstances will be on the level for the foreseeable, leasing might not be for you. Nor would buying on PCP finance.

To buy or lease an electric car, ICE, or hybrid – the choice is yours. Then again, choice is what our personal car leasing deals are all about. With so many types of car leasing to pick from, the ZenAuto team are here to ensure you get the deal (and the car, obviously) that works for you.