Leasing vs. Buying Your Next Car – Why PCH is a Great Investment

Leasing vs. Buying Your Next Car – Why PCH is a Great Investment

While the new car market remains gripped by uncertainty against the backdrop of Brexit, the one trend that’s clear is that Britons are buying fewer vehicles year-on-year.

In 2019, for example, new car sales slumped by 2.3% to a total of 2.3 million units, while this also represented the third consecutive year of decline in the UK.

There are other reasons for this too, including environmental concerns and the rising popularity of personal contract hire (PCH). We’ll address this in the post below, while asking why the latter represents such a viable investment.

What are the Benefits of Leasing?

When you lease a car, you’ll effectively rent this from a dealer for a fixed period of time (usually for 36 or 48 months).

Once this contract ends, you’ll have the option to return the car to a dealer like Zen Auto in exchange for a potential upgrade, or purchase it for an amount that has already been defined in the small print of the lease agreement.

There are a number of benefits associated with leasing, including the fact that cars tend to depreciate in value from the moment that you buy them.

More specifically, the average new car will see its value fall by more than 20% during the first 12 months of ownership. Its value will then depreciate by 10% annually over the course of the following four years, creating a scenario where motorists can save huge sums of money within a relatively short period of time.

Leasing negates this risk while also offering a brand new vehicle every 18 months to two years on average, in addition to providing short-term saving in the form of lower initial lease payments.

In terms of cost savings, it’s also fair to surmise that leasing a car will offer you access to worry-free maintenance, as the vast majority of repairs will be covered as part of the agreement and the associated manufacturer’s warranty.

When is Leasing a Good Idea?

With these points in mind, leasing is an option that enables you to make both short and long-term savings as a motorist. These can accumulate within a relatively short period of time too, while it’s also fair to say that this option minimises the stress associated with maintaining a vehicle.

However, leasing may not be viable in all instances, especially if you don’t intend to change your car with any great regularity or want to retain superior flexibility as an owner.

Make no mistake; leasing will afford you far less flexibility than buying, both in terms of managing your options and customising the vehicle to suit your precise tastes and requirements.

In general terms, however, leasing provides a relatively convenient and low-cost option that prevents you from being lumbered with a costly and depreciating asset over time. It’s also now widely available, so you can compare the market in order to identify the best possible value for your hard-earned cash.

 

 

 

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