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Leasing a car or buy?

If you’re in the market for a new car, one of the key decisions is whether to buy or lease the vehicle. There are important differences between leasing and buying a car, and it’s worth having a good idea of how each option works to make the right choice for you.


Differences between buying and leasing

Leasing a car gives you the flexibility to use the vehicle without owning it. There are several options for leasing a car, and the regular payments you make may be similar to a car loan. The big difference comes at the end of the lease – you could face a lump sum payment if you want to own the car, or you can hand in the old car and “rollover” the lease and continue leasing a new car. Read on to decide if leasing a car is right for you.

Leasing a car - how does it work?

If you’re in the market for a new vehicle, you may be thinking about leasing a car. There are important differences between leasing and buying, and it’s worth having a good idea of how each option works to make the right choice for you.

Leasing a car lets you use the vehicle, not own it

When you lease a car you're paying for the use of the vehicle over a set term. Depending on the type of lease, you may have the option of buying the car once the lease expires by making a lump sum payment known as a 'residual'.

Two main types of car leases

Broadly speaking there are two main types of lease - a 'finance' lease and an 'operating' lease. An operating lease is like a rental agreement - once the lease term ends you hand over the vehicle and no longer make any payments.

A variety of finance leases

Finance leases are a little more complicated. You pay a set monthly lease payment, and at the end of the lease term you can choose to pay the residual value of the car, or swap the lease over to a new vehicle and continue making monthly payments. Finance leases are popular among businesses because it's a way of providing employees with cars without making a substantial investment in vehicles, which depreciate rapidly.

We can help you to explore the car financing options best suited to your needs.

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