What are the pros and cons of leasing a car?

28/06/2021

What are the pros and cons of leasing a car?

As more people opt to lease their car rather than buying it outright, what are the pros and cons of leasing a car today?

The process of car leasing is straightforward but for those who are still confused about the issue, this article will spell out the reasons why you should, and should not, consider leasing a car.

How long will you keep your car?

The first question to ask when it comes to leasing a car, is how long will you keep the vehicle?

If you tend to buy a new car outright, and then run it for many years, then spending cash will make sense.

But for those who want to change their car every few years, and enjoy the manufacturer's warranty, then leasing could be the better option.

With Tilsun Leasing, you get to lease a new vehicle for between 24 and 48 months and when the agreement ends, switch to a new car.

Can you afford to buy a new car?

There's no doubt that when you spend cash on a new car, this can be a really large financial commitment.

And while many of us don't have large sums of money to invest, it's worth considering leasing.

That's because there's no large amount to pay upfront because you pay a deposit or initial rental, followed by monthly payments over an agreed period.

This initial payment is required, and you can choose whether it is the equivalent of one, three, six or nine months.

Do you prefer to own your car?

A potential downside to leasing a car in the UK is that you will never own the car.

It's essentially a long-term hire agreement and when this ends you hand the car back to the car leasing company.

So, if you prefer to own your own car, then leasing may not be for you.

Which will offer the best value for money?

If you aren't bothered about owning the vehicle and simply want a way to get behind the wheel of a brand-new car with the latest technology and mod cons, then leasing is for you.

Leasing can be an affordable way to drive new cars and switch new vehicles every few years.

But since the car will never belong to you, you need to appreciate that if you do buy the car outright that the depreciation means you are effectively losing money.

The difference between PCP and PCH

Some of the terminology used when leasing a car does cause some confusion with people.

PCH means personal contract hire and should not be confused with PCP, which is personal contract purchase.

PCP is a popular way to finance a car and there are some similarities between the two.

For example, you will need to make an upfront payment with PCH and PCP and then pay a monthly amount for an agreed period and have an agreed set mileage limit.

The big difference between PCH and PCP is that with personal contract hire there's no option to buy the car when the leasing agreement ends. You simply hand it back.

With a personal contract purchase, you can hand the car back to the finance company and use the equity for a new vehicle or you can pay the optional final payment - usually called the 'balloon payment' - so you will own the car when the agreement ends.

Deciding between leasing or buying a car

Essentially, when it comes to deciding between leasing or buying a car, a lot will come down to your preferences and personal circumstances.

Buying is the best choice if you want to own your car and keep it for many years.

However, leasing is the best choice if you want a brand-new car that comes with the manufacturer's warranty, and you are able to change it every few years.

Pros and cons of leasing a car

For more help and advice when it comes to the pros and cons of leasing a car, then it's time to speak with the friendly team at Tilsun Leasing on 03330 040 888.

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