Personal car leasing (personal contract hire and personal contract purchase) are rated as the most enquired about method of funding a new car
Buy or lease?
Buying:
The car is yours (if you have no HP)
Free to sell at any time should you need to
Leasing:
Agreed fixed term of your choice
Your low deposit and payments are based on the low purchase price, brought about by finance company purchasing power
You can include your servicing and tyre costs in your monthly payment
No nasty surprises at the end of the contract
Reasons not to Buy or Lease
Buying:
You will either be paying the purchase price or a large payment in one go all up front
Depreciation is your risk and not the finance companies risk
When you come to replace the car, you face having to deal with buyers or the traders
Leasing:
You must maintain a car to its service schedule to avoid additional costs at the end of the lease. This is also applicable to the condition of the car. Of course, if you buy a car, its value will be affected by its condition and service history
Contracts, whilst variable in term and initial payment are not quite as flexible as your choices if buying
Owning is only an option with a PCP, see below
Two main types of Personal Leasing
Personal Contract Hire: Allows you to run a car for a fixed monthly fee and you can include servicing/tyres as well. Whether solely for your own use or for use at work where you have a car allowance to pay for your own car. At the end of the contract you hand the car back to the leasing company.
Personal Contract Purchase: If you want to take advantage of the massive buying power of leasing companies but at the end of the contract have the option to buy the car, then this is for you. The purchase is optional and something that you can decide on at the end of the contract. The purchase balloon payment figure is fixed at the outset
What we need to know
How long you want your new car for
How many miles a year do you plan on covering
Will you want to include maintenance