The answer is – it depends. It’s not possible to simply say that one is always better than the other because the answer depends on the specifics of each individual situation. Leases and purchase loans are simply two different methods of vehicle financing (leasing is NOT renting). One finances the use of a vehicle; the other finances the purchase of a vehicle. One of the benefits of paying for a car in monthly installments is that it brings many of the top brands financially within reach of more people.
Just as in the Car Leasing UK, there is a lease deal available for every budget, and covering the full range of PCP, PCH, lease purchase, hire purchase and contract hire deals. While many people won’t have £106,000 up front to pay for an Aston Martin DB9 coupe, for instance, the £1500 a month for a lease deal is more achievable.
Figures now suggest that more luxury cars are bought on lease deals than outright, partly because buyers usually want to use their spare money for other investments and also because luxury cars retain higher residual values, making lease arrangements better value.
Car Leasing UK as we know it, is the most popular form of finance with a low initial outlay (3 months) and fixed monthly repayments.
Car Leasing UK hassle free motoring. A standard contract provides you the vehicle and road fund licence for the contract period, manufacturer breakdown and recovery services and allows maintenance costs to be built into the contract. Contract Hire is very efficient as it is treated as “off balance sheet” which allows rentals to be offset against taxable profits. If your business is VAT registered you may also reclaim 50% of the VAT on the finance element of the rental and 100% of the VAT of on maintenance element. There are no disposal risks at the end of the lease agreement, providing you keep within the contract mileage and look after the vehicle while in your care. This will allow you time searching for your next lease car as you are not responsible for the resale of your current lease car, and therefore eliminating any concerns over outstanding finance.
Some finance houses will allow you to buy the vehicle at the end of the contract as this will save the finance company time and money collecting it and then selling it. The value would be agreed at the end of the contract and would generally be in line with market value. Due to the collapse of the banks and the credit crunch which has had an effect on lending criteria starting from the middle of 2008, more and more people were finding themselves classed as a high risk by the banks.