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Leasing a Car vs Buying: Which Is Better?

In the UK, car leasing is an increasingly popular option for all drivers. Whether you’ve just passed your driving test and are on the exciting search for your first car, or you’re in a position to get behind the wheel of your dream car, leasing is an excellent option. 

But if you're in the market for a new car, you may be wondering whether to buy or lease. Both options have advantages and disadvantages, so it's important to weigh your needs before deciding.

For most drivers looking for a brand new car, the choice is between a Personal Contract Hire (PCH) and a Personal Contract Purchase (PCP). Buying a new car outright is less affordable than buying through finance. Due to this, our comparisons will be between PCH and PCP. 

Leasing a Car

A personal contract hire, or PCH, is a type of vehicle financing that allows individuals to lease a car for an agreed period of time, usually two to four years. At the end of the contract, you return the car to the dealership. 

There are several benefits to choosing a PCH over other methods of financing a car, such as taking out a loan or purchasing the vehicle outright, including: 

  • Lower monthly payments 
  • Driving a new car every few years
  • No depreciation concerns
  • Fixed monthly payments
  • Lower maintenance costs
  • Road tax is included in the lease price.

But if you're considering leasing a car, there are a few things you should keep in mind:

Firstly, when you lease a car, you're essentially renting it from the dealership for a set period. You'll make monthly payments, but at the end of the lease, you won't own the car – you'll have to return it to the dealership. 

Second, car leases typically have mileage limits, so if you do a lot of driving, you may pay more in mileage charges than if you owned the car outright.

Buying a Car 

A Personal Contract Purchase (PCP) is a type of car finance that gives you the option to buy the car at the end of the agreement. With a PCP, you pay an initial deposit followed by monthly payments for an agreed period. 

At the end of the term, you can buy the car outright (known as the balloon payment), hand it back to the dealership or trade it in for a new vehicle. 

PCP deals are typically only available on new cars, and they can be a great way to spread the cost of buying a new car if you're not sure whether you'll want to keep it long-term. 

The benefits of purchasing a car through PCP include: 

  • More affordable than buying outright
  • You will own the car at the end of your contract
  • You can sell the car
  • There are no mileage restrictions.

However, it's important to remember that with a PCP, there is always the risk that you could end up owing more than the car’s value if it depreciates quickly. Alongside that, as the car gets older, you will have to pay for any repairs and maintenance. 

It's also worth noting that buying a car through PCP costs more upfront than car leasing.

Leasing a Car vs Buying — The Verdict

Both car leasing and personal contract purchases are great ways to get behind the wheel of a brand new car. The better option relies on your circumstances and requirements. If you’re in the market for a new car and you’re not sure whether to lease or buy, you should consider: 

  • Your budget
  • Whether you want to own the vehicle or not
  • If you want to be responsible for maintenance.

Car leasing is the better option for most drivers as it allows you to choose from a wider range of vehicles for lower payments. 

If car leasing is the right choice for you, explore Tilsun Leasing’s massive selection of car leasing deals. If you have questions about car leasing, contact the Tilsun Leasing team today by calling 03330 040 888 or emailing [email protected].

Novuna Vehicle Solutions
Lex Autolease
Leasing Broker Federation

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