Used Or Lease

A key decision to make when it comes to getting a different vehicle for yourself will be whether to lease one or buy one. To make this decision there are countless variables that you need to consider. What car do you have now? How old is it? Did you buy it new or used? How much is it worth now? Do you intend to sell it?

Of course there are advantages and disadvantages to both leasing and buying, so naturally everything depends on your individual circumstances.

One of the most attractive aspects of a lease deal is that it enables you to drive a brand new car. There’s no doubting that whoever you are and whatever circumstances you’re in, this is an appealing proposition. What's more, the down payment for a lease could actually be less than the amount that you end up receiving for your current vehicle – if you are selling it of course. For example your used Hyundai Santa Fe sells for £7,000 and the down payment on your brand new lease Hyundai i40 is only £3,400. You get to drive a new car and end up with money in your pocket.

On the flip side, buying a used car instead of leasing a new one will prove far more cost effective in the long term. This is essentially because you pay for the car up front in full, rather than paying interest throughout the term of your lease. If we refer back to the above example in which you sell a Hyundai Santa Fe for £7,000, you could then use this money to buy a second hand Lexus IS for around £6,500. Initially you will be left with less disposable cash (£500 as opposed to the £3,600 that you would have in the lease example) but you will be saving between £200 and £300 every month for the length of the contract, which is usually 36 months.

In addition to these savings, you will own the car which means it is yours to do as you please with and you can sell it whenever you see fit to. With a lease you are committed to the payments for the duration of the term, and even at the end of the contract you will have to make larger payment – which could be the best part of £7,000 - £10,000 – if you actually want to keep the vehicle.

However, if you do not wish to keep your car at the end of a lease term then you can roll on to a new contract with a brand new vehicle – which is exactly what a lot of people want. You never have to worry about MOTs or warranty because you are always driving a new vehicle.