Car leasing guide

When you buy a vehicle, it becomes your property. You have full ownership of the car, meaning you can use it as you wish, modify it, or sell it whenever you choose.

When you lease a vehicle, you are renting it for a fixed period. At the end of the lease term, you have to return the vehicle, and you don't own it.

If you buy a car outright, you pay the full amount upfront.

If you finance the car (take a loan), you make monthly payments for the duration of the loan. After the loan is paid off, the car is yours.

With leasing, you pay a monthly fee for the duration of the lease term, typically 2-4 years. Monthly payments are usually lower than car finance.

Once you own a vehicle, you are responsible for its maintenance, repairs, and any other associated costs, including wear and tear. However, you have the flexibility to choose where and how to maintain the car.

Once you own the car, you can keep it for as long as you want. If your needs change, you can sell the car and buy another one at any time. You have full flexibility.

Leasing is generally a long-term commitment for the duration of the contract (usually 2 to 4 years). Early termination can result in hefty fees, so it’s less flexible than ownership.

There are no mileage limits when you own a car. You can drive as much as you like without worrying about penalties. If you decide to purchase on PCP, then you will have agreed to a yearly mileage allowance.

Lease agreements have mileage limits - If you exceed the limit, you may face significant fees for excess mileage.

When you buy a car, you have the option to sell it or trade it in at any time, but it’s your choice. After the car is paid off, you can keep it for as long as you want.

At the end of the lease term, you generally have these options:

1. Return the car and lease a new one
2. Buy the car
3. Extend the lease if allowed by the leasing company

If you are VAT registered, you will be able to claim the VAT back on your purchase.

Lease payments are deductible for business use.

You own the vehicle, can modify it, and enjoy long-term savings but are responsible for all costs, including depreciation, maintenance, and repairs.

You don’t own the vehicle, but you have lower monthly payments and fewer maintenance concerns. It’s more suitable for people who prefer a new car every few years and don’t want to deal with long-term ownership hassles.