Should I Buy or Lease a Car in the UK?

Whether to purchase a brand new car or lease a car in the UK is becoming a more commonly asked question. Rapidly changing technologies, such as car batteries, coupled with the prospect of large vehicle depreciation is making many people look at leasing differently. There are currently an estimated 1.5 million leased cars on British roads with that number increasing every year. Here DreamLease will attempt to explain and clarify some of the advantages and disadvantages of leasing and those of a traditional purchase.

Car Leasing vs Traditional Purchase

Simply defined, leasing a car in the UK allows you to drive a brand new car, typically over a 2, 3 or 4-year period without ever owning the car.

Leasing allows you to simply pay an initial payment at the start of the lease and then a fixed monthly payment every month over the lease term. At the end of the lease, you simply hand the car back to the finance company and are then free to lease another brand new car with new modern features such as more sophisticated safety equipment or improved electric range.

At the start of the lease, you agree to an annual mileage. As long as this hasn't been exceeded and the car is in a reasonable condition then nothing else needs to be paid. If you have driven additional miles then a small fixed price per mile driven is chargeable which is agreed upon at the beginning of the lease. If the car is returned damaged and the funder deems this over and above fair wear and tear for the age and mileage of the car, they may impose a charge, please refer to your leasing agreement for further information.


Benefits of Leasing a Car

Drive a stylish, reliable, brand-new car with many added benefits.

  • Most individuals are eligible to lease.
  • Monthly Payment make Leasing a Car Affordable
  • Road Tax and Manufacturers Warranty Included
  • Delivery and Collection Included
  • Drive a new car every 2-4 years 
  • Higher-spec cars are typically more attainable than a traditional purchase.
  • Avoid Expensive Maintenance associated with second-hand cars.
  • Leasing Helps You Protect Your Savings 
  • Leasing Increases your Potential Choice of Brands and Modern Technologies.
  • Fixed Easy to Budget Vehicle Costs
  • No Depreciation and No Interest Payments


Is It Cheaper To Lease Or Buy A Car?

This is a complicated question as vehicle prices vary considerably as well as their residual value. DreamLease would reason that leasing is more cost effective than buying a brand-new car outright. For Example, at the time of writing this 24/05/2022, you can lease a Nissan Qashqai 1.3 for 24 months for £198/pm with a total cost of £7,164 including road tax.

Had you bought this car outright the depreciation would likely have been thousands of pounds more than this over the 24 months.

DreamLease were able to find 2-year-old vehicles with 12,000 miles which had depreciated over £12,000 making the leasing option approximately £5,000 more cost-effective in this example.


Car Leasing Considerations?

Please consider these elements before leasing a car in the UK.

When Leasing a Car through DreamLease you must understand that you do not own the vehicle at any time and purchasing the car is not an option.

The car needs to be fully maintained with manufacturer-approved parts and needs to meet the funder's "Fair Wear and Tear Policy" at the end of the lease.

Charges will be levied if the car is damaged or if additional miles have been driven over the agreed annual mileage. Early termination of the lease contract can be expensive and should be considered.

Poor credit can make it difficult to lease a vehicle. It is the customer's responsibility to keep the car insured with a fully comprehensive cover over the entire lease term.


Manufacturer's Warranty & Maintenance Packages

All our car leases come with a manufacturer's warranty which occasionally lasts longer than the total lease term. This means that most mechanical failures are covered with no additional cost to you.

Maintenance Packages can also be added to our lease deals which, depending on the funder, will cover many components including, tyres, wiper blades, exhausts, brake pads and brake discs. Please note that accidental damage is not usually covered.

For specific information please enquire on 01494 424242 or email us at


Buying a Car Instead of Leasing

  1. Your first option is to buy the car with savings. Before going ahead be aware of the possible depreciation. This can be significantly higher with brand new cars which typically lose value as soon as you buy them.
  2. Bank Loans can also be used to purchase all or part of a car outright. With this method please be aware that although you own the car, monthly payments plus interest on the loan will be payable.
  3. A Hire Purchase or HP distributes the total cost of a car over fixed monthly payments and an initial deposit. At the end of this an ‘option to purchase fee’ is charged and you then own the car.
  4. Personal Contract Purchase or PCP demands not only an initial deposit and monthly payments but a balloon payment at the end to keep the car. The balloon payment however is not compulsory meaning that at this point you can hand the car back and walk away.

What our customers say...

G Brat G Brat I can't think of any fault in the whole process.
5 stars

Very quick and helpful in response to queries. It was all pretty painless! Plus, in my search for suitable vehicles across a number of companies, their prices looked to be really competitive.

24 August 2023

Rich Luck Can’t rate highly enough.
5 stars

Skye was an amazing representative. Cheerful, helpful, respectful and energetic. Can’t rate her highly enough.


Carl Moreton Carl Moreton Great communication
5 stars

I was kept up to date with the process by email and phone calls and with all forms completed, I was given a call to let me know I could have my car delivered a lot quicker than was expected. Great communication and car delivered when expected.

14 June 2023

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