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Should I lease or buy my next car?

Should I lease or buy my next car?
24/03/2022

Should I lease or buy my next car??

Getting a new car may seem daunting but is it as difficult as some people believe? If you consider Contract Hire then getting yourself a brand new car maybe is easier than you think.

What is Contract Hire?

Contract Hire allows you as the end-user or lessee to hire a car for a set period of time and pre-determined mileage, in return for a fixed monthly rental which includes road tax for the full period.

How much money is required upfront?

An initial payment of three months' instalments is usually required although lower/higher initial payments can be considered subject to status.

What contract duration and mileage allowances do you offer?

Contract duration can be from 24 to 60 months on all new vehicles up to a total mileage allowance of 155,000 miles.

Who carries the ongoing maintenance costs?

This depends on the contract selected. If a customer own maintenance contract is chosen, you as the customer are responsible for all routine servicing and maintenance costs under the terms of the agreement.

If a maintenance package is taken, then you need never worry about any unexpected servicing or maintenance costs. MOT and servicing would be included for the full agreement. A blown bulb, a new tyre or a replacement clutch is only a free phone call away from a quick, no-cost repair. This gives you great peace of mind and allows you to use the vehicle without the worry of unexpected bills.

Who owns the vehicle?

You never actually own the vehicle. Ownership of the vehicle remains with the funder during the contract period, so you don’t have to worry about the depreciation of the vehicle.

Who insures the vehicle?

Responsibility for insurance is with you as the driver of the vehicle and this must be fully comprehensive.

What about vehicle collection and delivery?

We arrange delivery and collection anywhere in the mainland UK free of charge.

What happens if I want to terminate the contract early?

If you wish to end the contract early a termination charge is payable. Typically, this is 50% of the outstanding monthly rentals payable.

What are the end of the contract options?

You have two options available at the end of the contract period.

  1. Hand the vehicle back and replace with a new one.

  2. Extend the contract for 6 months or 12 months, usually at a reduced rate.

Are there any hidden costs?

Additional charges are possible for two reasons. If the vehicle has done more miles than contracted. This is the excess mileage charge, which will be written on the contract and will vary from vehicle to vehicle. The second reason is if your car is damaged in a way that goes beyond fair wear and tears, you may be charged.

Advantages of Leasing

  • Fixed motoring costs - Full manufacturer warranty
  • Lower monthly rentals - Drive a new car every 2 - 5 years
  • Road Tax is included - Full maintenance covers MOTs, servicing and any repairs
  • No depreciation or disposal risk
  • Simply hand the vehicle back at the end

Drawbacks of Leasing

  • You will never own the vehicle

  • Early termination of the agreement can be expensive

  • It can be difficult to lease if your credit rating is extremely poor

  • Vehicle must be returned in a well maintained condition in line with the Fair, Wear and Tear guidelines

Advantages of Buying

  • You have full ownership of the vehicle

  • You can drive as many miles as you want

  • You can modify and treat the car how you wish

Drawbacks of Buying

  • Selling can be difficult and time-consuming

  • Not always covered by warranty

  • You have to arrange and pay for Road Tax

  • Your vehicle depreciates as soon as you drive it on the road
  • Normally a large deposit or lump sum is needed which reduces your savings

So is leasing a better option than buying?

Leasing is a good option as cars are historically one of the fastest depreciating commodities you can own. Leasing gives you the option of a brand new vehicle for a fixed monthly rental plus a full maintenance package can be included giving you the peace of mind that you will not have any nasty unexpected motoring costs.

Think about what you would like your initial and monthly rentals to be and contact us for your free quotation today you may be driving your dream car sooner than you think.

For more information on  Should I lease or buy my next car?  talk to  First Vehicle Finance

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