There are lots of different ways to buy a car. If you’re wondering whether to buy outright, lease, or get car finance, it’s important to understand the differences before you make your decision.
In this guide, we explain car leasing and explore how it differs from buying or financing a car so you can make an informed choice.
If you’re buying a new or used car, there are lots of things you might want to consider. For a full list of what to check when buying a used car, take a look at our guide.
Upon finding a suitable car within your budget, check its history using the DVLA website. To do this, you need to know the car’s number plate.
The DVLA’s online database will tell you whether the car is taxed and if it has passed its MOT. You can also check the full MOT history to discover whether there are any underlying issues with the car.
Validating that all the details match the seller’s advertisement can help ensure you have an accurate picture of the car’s history and condition.
Once you’re happy that everything is as the seller claims, organise a time to inspect the car and take it for a test drive.
It’s best to inspect a car during the day, ideally when it’s dry, as it’ll be easier to spot damage in these conditions. If the seller is private (if you’re not buying from a dealership), meeting them at their house means you’ll have a record of their address if something goes wrong with the car.
When you take the car for a test drive, try to get at least 15 minutes of driving on various road types. Ask to take the car on a mix of minor and major roads so that you have plenty of time to test it in a variety of conditions. This will help you to see if everything is working as it should.
If you’re happy with the car, your next step is to agree a deal to buy it. If the car has any minor defects, has advisories on its MOT record, or has a part that likely needs changing soon, you could try to negotiate a lower price.
Upon agreeing a deal, you must ensure you get original copies of the following documents:
Never buy a car without the logbook. You will need this to transfer ownership and organise road tax as soon as you complete the purchase. The seller will also help you fill in the green ‘new keeper slip’ so that the DVLA can update the vehicle so it is registered to you.
If you want to buy a car outright, there are a few ways to pay for it:
Leasing a car is essentially renting one over a long period, typically between 12 to 60 months. During this timeframe, you will make monthly payments for the car you use. Some vehicle leasing agreements offer add-ons like servicing, maintenance, and breakdown cover included as a package deal.
There are, however, limitations that come with leasing a car. For example, as part of your leasing agreement, mileage restrictions will mean you have to pay additional charges if you exceed a certain distance.
With most leasing agreements, at the end of the term you must give the car back to the leasing company or dealership. The car never belongs to you, even though most lease deals require you to make a deposit.
When considering the best way to buy a car, it’s important to think about your circumstances and whether they’re likely to change soon. If they are, buying a second-hand car may be more convenient than signing up for a leasing agreement.
Let’s look at some real-world examples to help you make the right decision about what’s best for you.
The main difference between leasing and financing a car is that you won’t ever own the vehicle when you take out a lease agreement.
On the other hand, when financing a car, you will have the option to own the car once you’ve paid off the agreement. Whether this happens at the end of the agreement, or there is a fee involved, depends on the type of finance you get.
When you finance a car, the lender pays the dealership for your car, and you agree to make monthly payments over an agreed period of time. What happens when your agreement ends depends on the type of finance you have.
Car finance allows you to spread the cost of a car over a period of time, which helps you afford a vehicle you might not otherwise have been able to buy.
The most popular types of car finance are:
A Conditional Sale (CS) finance agreement is similar to a Hire Purchase (HP) agreement in that you will make fixed monthly payments over an agreed term.
It’s important to know that, with CS finance, you automatically become the car’s owner once you’ve made your final payment. There is no fee or balloon payment involved.
On a Hire Purchase (HP) plan, you usually put down a deposit at the start of the agreement. Then, you make fixed monthly payments over an agreed term.
At the end of the agreement, you can become the vehicle’s owner by paying the ‘option to purchase fee’. The size of this fee depends on several factors, and your lender will tell you before you sign your agreement how much this will be.
With a Personal Contract Purchase (PCP) plan, you will put down a deposit and make monthly payments for the duration of the agreement. According to MoneyHelper, your deposit is usually around 10% of the value of the car, but it can vary depending on your circumstances.
Once the agreement ends, you can buy the car outright by paying the ‘balloon payment’, or give it back to the finance company and start a new PCP agreement.
The main difference between car leasing and car finance is ownership, as most car finance agreements include a final payment so you can become the car owner. With leasing, you never own the car, and must return it at the end of the agreement.
Some finance deals require a deposit, which can be cash or from a part exchange of another vehicle you own. This depends on your circumstances, though there are some lenders that offer no deposit car finance.
Buying or leasing a car is not a decision you should make quickly. Take time to consider the pros and cons so you can find what’s best for your situation.
If you’re interested in financing your next car, we could help. Our team of experts would be happy to guide you onto a better road ahead. Find out how we could help you with car finance today.
We offer a Conditional Sale agreement. This is where you make monthly payments, and legally own the car once you’ve made your final payment.
Representative 35.5% APR.
A lease deal can be a flexible alternative to buying your car outright, particularly if you want to drive a brand-new car and change it every few years. With a lease car, it’s important to understand the conditions of your agreement, as you can incur additional fees if you exceed your mileage limits, or the car is not returned in good condition.
Car finance can be a convenient and flexible car-buying solution for many people, and unlike leasing, it gives the buyer the option to buy the car at the end of the agreement. However, no one can tell you what’s best for you because everyone’s situation is different. That’s why it’s important to understand the ins and outs of your agreement before you sign anything.
To get started, why not try out our car finance calculator? It will show you how much your monthly repayments might be, depending on how much you’re looking to borrow and for how long.
If you can’t keep up with your lease payments, the leasing company may terminate your contract and repossess the car. If you are experiencing financial difficulty, reach out to your lender and they can discuss what support is available.
The monthly costs of leasing a car will vary depending on factors like the type of car, the agreed annual mileage, and the lease term. According to Auto Trader, leasing deals can range anywhere from £100-£1,000 per month. However, some monthly payments could be more, especially if you want to lease a rare or classic car.
There are lots of different ways to buy a car. If you’re wondering whether to buy outright, lease, or get car finance, it’s important to understand the differences before you make your decision.
In this guide, we explain car leasing and explore how it differs from buying or financing a car so you can make an informed choice.
If you’re buying a new or used car, there are lots of things you might want to consider. For a full list of what to check when buying a used car, take a look at our guide.
Upon finding a suitable car within your budget, check its history using the DVLA website. To do this, you need to know the car’s number plate.
The DVLA’s online database will tell you whether the car is taxed and if it has passed its MOT. You can also check the full MOT history to discover whether there are any underlying issues with the car.
Validating that all the details match the seller’s advertisement can help ensure you have an accurate picture of the car’s history and condition.
Once you’re happy that everything is as the seller claims, organise a time to inspect the car and take it for a test drive.
It’s best to inspect a car during the day, ideally when it’s dry, as it’ll be easier to spot damage in these conditions. If the seller is private (if you’re not buying from a dealership), meeting them at their house means you’ll have a record of their address if something goes wrong with the car.
When you take the car for a test drive, try to get at least 15 minutes of driving on various road types. Ask to take the car on a mix of minor and major roads so that you have plenty of time to test it in a variety of conditions. This will help you to see if everything is working as it should.
If you’re happy with the car, your next step is to agree a deal to buy it. If the car has any minor defects, has advisories on its MOT record, or has a part that likely needs changing soon, you could try to negotiate a lower price.
Upon agreeing a deal, you must ensure you get original copies of the following documents:
Never buy a car without the logbook. You will need this to transfer ownership and organise road tax as soon as you complete the purchase. The seller will also help you fill in the green ‘new keeper slip’ so that the DVLA can update the vehicle so it is registered to you.
If you want to buy a car outright, there are a few ways to pay for it:
Leasing a car is essentially renting one over a long period, typically between 12 to 60 months. During this timeframe, you will make monthly payments for the car you use. Some vehicle leasing agreements offer add-ons like servicing, maintenance, and breakdown cover included as a package deal.
There are, however, limitations that come with leasing a car. For example, as part of your leasing agreement, mileage restrictions will mean you have to pay additional charges if you exceed a certain distance.
With most leasing agreements, at the end of the term you must give the car back to the leasing company or dealership. The car never belongs to you, even though most lease deals require you to make a deposit.
When considering the best way to buy a car, it’s important to think about your circumstances and whether they’re likely to change soon. If they are, buying a second-hand car may be more convenient than signing up for a leasing agreement.
Let’s look at some real-world examples to help you make the right decision about what’s best for you.
The main difference between leasing and financing a car is that you won’t ever own the vehicle when you take out a lease agreement.
On the other hand, when financing a car, you will have the option to own the car once you’ve paid off the agreement. Whether this happens at the end of the agreement, or there is a fee involved, depends on the type of finance you get.
When you finance a car, the lender pays the dealership for your car, and you agree to make monthly payments over an agreed period of time. What happens when your agreement ends depends on the type of finance you have.
Car finance allows you to spread the cost of a car over a period of time, which helps you afford a vehicle you might not otherwise have been able to buy.
The most popular types of car finance are:
A Conditional Sale (CS) finance agreement is similar to a Hire Purchase (HP) agreement in that you will make fixed monthly payments over an agreed term.
It’s important to know that, with CS finance, you automatically become the car’s owner once you’ve made your final payment. There is no fee or balloon payment involved.
On a Hire Purchase (HP) plan, you usually put down a deposit at the start of the agreement. Then, you make fixed monthly payments over an agreed term.
At the end of the agreement, you can become the vehicle’s owner by paying the ‘option to purchase fee’. The size of this fee depends on several factors, and your lender will tell you before you sign your agreement how much this will be.
With a Personal Contract Purchase (PCP) plan, you will put down a deposit and make monthly payments for the duration of the agreement. According to MoneyHelper, your deposit is usually around 10% of the value of the car, but it can vary depending on your circumstances.
Once the agreement ends, you can buy the car outright by paying the ‘balloon payment’, or give it back to the finance company and start a new PCP agreement.
The main difference between car leasing and car finance is ownership, as most car finance agreements include a final payment so you can become the car owner. With leasing, you never own the car, and must return it at the end of the agreement.
Some finance deals require a deposit, which can be cash or from a part exchange of another vehicle you own. This depends on your circumstances, though there are some lenders that offer no deposit car finance.
Buying or leasing a car is not a decision you should make quickly. Take time to consider the pros and cons so you can find what’s best for your situation.
If you’re interested in financing your next car, we could help. Our team of experts would be happy to guide you onto a better road ahead. Find out how we could help you with car finance today.
We offer a Conditional Sale agreement. This is where you make monthly payments, and legally own the car once you’ve made your final payment.
Representative 35.5% APR.
A lease deal can be a flexible alternative to buying your car outright, particularly if you want to drive a brand-new car and change it every few years. With a lease car, it’s important to understand the conditions of your agreement, as you can incur additional fees if you exceed your mileage limits, or the car is not returned in good condition.
Car finance can be a convenient and flexible car-buying solution for many people, and unlike leasing, it gives the buyer the option to buy the car at the end of the agreement. However, no one can tell you what’s best for you because everyone’s situation is different. That’s why it’s important to understand the ins and outs of your agreement before you sign anything.
To get started, why not try out our car finance calculator? It will show you how much your monthly repayments might be, depending on how much you’re looking to borrow and for how long.
If you can’t keep up with your lease payments, the leasing company may terminate your contract and repossess the car. If you are experiencing financial difficulty, reach out to your lender and they can discuss what support is available.
The monthly costs of leasing a car will vary depending on factors like the type of car, the agreed annual mileage, and the lease term. According to Auto Trader, leasing deals can range anywhere from £100-£1,000 per month. However, some monthly payments could be more, especially if you want to lease a rare or classic car.
Moneybarn is a member of the Finance and Leasing Association, the official trade organisation of the motor finance industry. The FLA promotes best practice in the motor finance industry for lending and leasing to consumers and businesses.
Moneybarn is the trading style of Moneybarn No. 1 Limited, a company registered in England and Wales with company number 04496573, and Moneybarn Limited, a company registered in England and Wales with company number 02766324. The registered address for these companies is: Athena House, Bedford Road, Petersfield, Hampshire, GU32 3LJ.
Moneybarn’s VAT registration number is 180 5559 52.
Moneybarn Limited is authorised and regulated by the Financial Conduct Authority (Financial Services reference No. 702781)
Moneybarn No. 1 Limited is authorised and regulated by the Financial Conduct Authority (Financial Services reference No. 702780)