Lease or finance
Discussion
they are just terms both mean pretty much the same thing
finance covers any way of paying for a car on any type of payment plan, lease will generally refer to any type of agreement where you do not get instant ownership of the car, and these agreements come in many forms.
I am not sure that any faults with the vehicle are covered by most lease agreements you seem to be under the impression it's just like having a rental, generally this is not the case, anything not covered by any warranty or maintenance plan that might be provided you would normally be expected to put right yourself before returning the vehicle.
finance covers any way of paying for a car on any type of payment plan, lease will generally refer to any type of agreement where you do not get instant ownership of the car, and these agreements come in many forms.
I am not sure that any faults with the vehicle are covered by most lease agreements you seem to be under the impression it's just like having a rental, generally this is not the case, anything not covered by any warranty or maintenance plan that might be provided you would normally be expected to put right yourself before returning the vehicle.
It depends on what you want to do. HP or PCP finance means you have the option to own the car outright at the end, so if you're wanting to own the car then this is the way to go. If you're keeping it for a while, Hire Purchase is the way to go, as once the final payment comes out, that's it; you legally own the car, job done. If you're perhaps thinking of getting a new car every 2-3 years, then PCP (Personal Contract Purchase) is better; it takes the predicted value of the car at the end of the agreement, and defers it until the very end. You pay no interest on that value, and no amount of deposit will change it. The result is much lower monthly payments, and you have the option to own the car outright at the end.
For example, I sell Fiat Pandas with a list price of £7645 at £99 deposit, then £99 per month over 48 months, with £1400 deposit contribution. However, the 48th payment would be around £2000. You have 3 options at that stage:
1) Pay £2000, own the car outright. Job done
2) Trade the car in for another one. Doesn't have to be the same make or model, or the same dealer. Any difference between the settlement figure (at this point it'd be the £2000 or slightly over if you were to trade in a couple of months early, which at the moment is easy to do) is equity to use as part deposit for the next car.
3) Hand the car back to the finance company, walk away, job done.
Some people say that it's 'just a lease, I'll never own the car'. Yes, there are similarities, but you have the flexibility to own the car at the end. Plus, it makes it very simple to change cars every 2-3 years.
Leasing on the other hand, is basically renting a car over a long period of time. Unlike HP/PCP, you never have the option to own the car at the end. It may be beneficial in some circumstances e.g. if the car is to be used by a business, and I certainly see why people would go for it privately, but in my experience PCP finance would be the best bet.
For example, I sell Fiat Pandas with a list price of £7645 at £99 deposit, then £99 per month over 48 months, with £1400 deposit contribution. However, the 48th payment would be around £2000. You have 3 options at that stage:
1) Pay £2000, own the car outright. Job done
2) Trade the car in for another one. Doesn't have to be the same make or model, or the same dealer. Any difference between the settlement figure (at this point it'd be the £2000 or slightly over if you were to trade in a couple of months early, which at the moment is easy to do) is equity to use as part deposit for the next car.
3) Hand the car back to the finance company, walk away, job done.
Some people say that it's 'just a lease, I'll never own the car'. Yes, there are similarities, but you have the flexibility to own the car at the end. Plus, it makes it very simple to change cars every 2-3 years.
Leasing on the other hand, is basically renting a car over a long period of time. Unlike HP/PCP, you never have the option to own the car at the end. It may be beneficial in some circumstances e.g. if the car is to be used by a business, and I certainly see why people would go for it privately, but in my experience PCP finance would be the best bet.
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