Should I Lease a New Car or Buy a Used Car?
What do you intend to use your vehicle for? Will it be subjected to heavy usage. such as off-roading or carrying equipment? Or will it primarily serve practical purposes like the school run and commuting to work? Is there a likelihood of the vehicle being exposed to a high risk of damage?
Benefits of Buying a Used Car
You can drive the car home immediately. Whether you’re purchasing locally or online, once you’ve made the decision. you can typically take possession of the vehicle the same day.
Minor imperfections are less concerning.
Used cars may already have wear and tear from previous owners.
However, as the owner, you might not worry about minor dents or scratches in a small accident. This can provide peace of mind despite the car’s pre-existing condition.
Avoid the steep depreciation curve. New cars can lose 15-35% of their value in the first year, and up to 40-60% by the third year. By opting for a used car, you can sidestep this significant financial loss.
Disadvantages of Buying a Used Car
Repair expenses fall solely on your shoulders. While maintenance is crucial for both new and used cars, new vehicles typically come with warranties and are exempt from MOT inspections for the first 3 years. On the other hand, older cars, particularly those in premium brands, tend to incur higher repair and maintenance costs. Without the protection of a warranty, owners must foot the bill for these expenses out-of-pocket. This cost is often overlooked when comparing the option of leasing a new vehicle versus purchasing an older one.
Doubt regarding the car’s past and usage. Since the vehicle has been owned by one or more previous owners, there’s uncertainty surrounding its servicing history, usage, and the possibility of tampering with the mileage (car clocking), posing a potential risk. While manufacturer-approved used options exist, they may come with inflated prices, leading you to pay more than necessary.
Lack of customization options. When purchasing a new car, you have the freedom to select features like the sound system, interior and exterior color, and heated rear seats to perfectly suit your preferences. This level of customization allows you to tailor the car precisely to your needs, which is not possible when buying a used vehicle.
Benefits of Leasing a New Car
Lower upfront costs and fixed expenses. Leasing a vehicle typically involves lower initial expenditures compared to purchasing a car outright. Once leased, the price stays the same throughout the lease term, offering predictability and making budgeting easier without unexpected cost changes.
No worries about depreciation or resale value. When you lease a car, you’re not liable for any depreciation or decrease in its market worth, nor do you need to fret about selling the vehicle later on. This is especially advantageous in today’s landscape with a transitioning market towards an electric future.
Regularly upgrading to a new car.
Leasing provides the flexibility to switch vehicles every two to four years without worrying about depreciation, maintenance, or the hassle of selling the car.
Disadvantages of Leasing a New Car
Limited ability to modify the car.
In a lease, you’re the registered keeper, not the owner. This means you can’t make changes that might void the warranty or can’t be reversed before returning the vehicle.
Possible charges for wear and tear. Returning the vehicle within the BVRLA Fair Wear and Tear guidelines is essential. If the vehicle’s condition falls outside these guidelines, you may face penalties.
Continuous payments.
When you buy a vehicle, eventually, you’ll complete all payments (if you keep the car). At that point, you won’t have to make monthly payments anymore.In contrast, if you lease vehicles regularly, you’ll always have ongoing payments
Summary:
Buying a used car is a practical choice if you intend to keep and use it until the end of its lifespan, especially for heavy usage scenarios prone to frequent damage.
On the other hand, leasing is ideal for those seeking hassle-free motoring with fixed costs and a desire to switch cars every two to four years. It offers financial savings and certainty around expenses.
