Is It Better To Buy or Lease a Car?

12th Apr 2021

Is It Better To Buy or Lease a Car?

Like so many big finance decisions in life, car ownership poses a lot of questions. Should I lease or buy a car? What am I using the car for? Are electric cars worth it?

On paper, it might sound smart to buy a car outright and be done with monthly payments. But there’s a whole lot more to it than that. For example:

• A new car will lose 40 per cent of its value in the first year alone

• Service and repair costs add up quickly

• Second-hand cars may be unreliable or subject to higher road tax thanks to emissions.

When you add up these costs over a standard leasing period (usually two to four years), those monthly payments don’t seem so daunting.

What do I get when I lease a car?

If you’re looking for reliability, safety and affordability, leasing is by far your best option. It comes in two basic forms: personal or business contract hire. The former may be cheaper, but the latter does offer other benefits such as tax breaks.

The process is simple. You approach a broker and discuss your options – personal or business leasing. You determine your contract length, i.e. two to four years, and go through a small credit check. Once that’s passed, you pay a deposit and commit to small monthly payments. When your lease time is up, you can give it back – no questions asked.

No fiddly admin

Buying a car comes with all manner of struggles from transfer of ownership to bartering with salespersons. With leasing, it’s one simple credit check and you’re away.

A new car without the cost

Buying a new motor worth tens of thousands of pounds is pretty much impossible for most. With leasing, you get the latest vehicle on the market for one fair deposit and fixed monthly payments. It comes with a warranty, and trips to the mechanic will be few and far between.

Tax benefits

Road tax is covered with personal car leases, while business car leases offer other benefits like VAT rebates between 50 and 100 per cent.


Most brokers will offer a standard maintenance package with a car lease. This will cover servicing, minor repairs and replacement tyres or batteries, saving you even more money.

Environmentally friendly options

Leasing gives you access to the newest cars on the market, many of which offer a significantly smaller carbon footprint than second-hand older cars. Cruise through ultra-low emission zones with no problems – you could even consider leasing a fully electric vehicle.

Swap it out

How many people can say they’ve swapped their car for a newer model without losing money? Depreciation has no effect on leasing – you can upgrade to the newest model when your contract is over, or negotiate a new deal.

Why leasing may not be for you…

Safety and reliability are two huge benefits of leasing. But be wary that there are some stipulations with your contract, for example:

• Your broker will propose a mileage limit (finance leases are a good alternative here if you want to own the car afterwards)

• You may not pass the credit checks (but there are more expensive options available).

Of course, not every driver wants the newest, shiniest model. You might just need something cheap and easy to get you from A to B. But as a long-term investment, leasing will always offer the best value.

Discover your leasing options with Car Lease Agent