Home > About Arval > Insights > Leasing Vs Buying Vehicle

Leasing vs. buying a vehicle

Leasing vs. buying a vehicle

Tuesday, 10 October, 2017

lease vs buying a vehicle

Lease or buy? That’s the question you might be asking if you’re looking for a new car or van.

As you might expect, both options have their pros and cons. So, when it comes to car leasing and car buying, we’d like to shed a bit of light on which one could be right for you.



Why would you lease a car instead of buying?

      - Spread the cost across a number of years

      - Benefit from the buying power of a major leasing company

      - Remove the risk of depreciation or the hassle of selling the vehicle on

      - Bolt on useful services like maintenance, breakdown and insurance


Hundreds of thousands of businesses and individuals lease their vehicles and it could be right for you too. It gives you access to a brand new car or van for a fixed monthly cost so you don’t need to finance the whole vehicle up front. You can choose from pretty much any make or model on the market, and you don’t have to worry about selling it on when you want a new one.

How do you lease a car?

At the beginning of the lease, you decide the duration and mileage that suits your needs. It’s also easy to bolt on other products like breakdown cover, servicing and maintenance and insurance – all of which can be absorbed within the monthly lease rental.

When the lease comes to an end, you have options. If you love the vehicle you’re in it’s possible to extend the lease term. If you want something new, and the vehicle is in a good condition for its age, you can simply hand it back and walk away or select your next one. You should be aware though that if it’s not in good condition you might face some charges. This is all assessed against independent industry guidelines so it’s a fair and transparent process. To better understand what’s fair wear and what isn’t check out our guide.

Leasing is often cost-effective. Because we buy thousands of vehicles every year, large leasing companies like Arval can negotiate vehicle discounts that we can pass onto you through the lease rental – see our latest van and car lease offers to get an idea of pricing and models available. This means leasing can be less expensive on a month-by-month basis and can be done with a relatively small deposit, typically just three months’ worth of rentals. Leasing frees up money that you can invest in other things, and it’s worth noting that businesses can reclaim 50% of the VAT.

If you take out a lease package that includes things like service and maintenance, breakdown and insurance (like Arval Total Care), you don’t have to worry about being hit by any unexpected costs.

When leasing it’s important to set a realistic annual mileage in the contract. If you’re doing significantly less you may be paying more than you need to each month. If you’re going significantly over you could face charges at the end of the contract. It’s not set in stone though – if mid-way through the vehicle lease you want to adjust your contracted mileage you can do so.


Why do some people still decide to buy?

      - Avoid caps on mileage

      - Keep it for as long as you want

      - Pay for the vehicle in one go

      - Opt for something that’s second hand

While leasing brings its benefits, for some people buying a car works. There aren’t any caps on mileage or how long you keep it and there are no restrictions on modifying your vehicle. You can keep it indefinitely, only selling it when it suits you. Of course you can also choose to trade it in against the next car you buy.

While you may be faced with a higher up-front cost when you buy a car, once you’ve paid off the vehicle you should find yourself free from monthly payments, although don’t forget about those ongoing costs like insurance, servicing, MOT and road fund licence.

You can also treat the vehicle as you wish because it’s your asset, so if you regularly pick up scratches and dents you don’t have to worry about being charged for them, even though it’s likely to affect you in the form of depreciation when you come to sell it on.


Different car finance options explained

There are a few different ways to lease a car but one of the most popular and most flexible is Contract Hire.

It provides a big choice of vehicles and lets you choose your contract length, annual mileage and extras such as lease insurance and maintenance packages.

For many years there has been a tradition in the UK of purchasing vehicles. However, in recent years the number of individuals and businesses leasing their cars and vans has grown significantly and for good reason. We hope this information has helped you to make an informed decision and feel free to contact our expert customer service team to discuss your needs in more detail.