Buying vs leasing
04 September
The pros and cons
Across the UK, van and car dealers are bracing themselves for the traditional September sales surge. Just like many private buyers, fleet managers can be attracted by the arrival of the new number plates that tell everyone just how new their vehicle is.
But simply buying your new truck, van or car is only part of the decision to be made, however, as buyers are now faced with a complex array of alternative purchasing schemes. There can involve maintenance contracts, leasing arrangements and mileage predictions. To help you through this purchasing puzzle, here’s our simple guide to the different buying schemes available:
Buying with cash
Pros
This is the cheapest, simplest method, with no interest or admin fees. You can strike better deals with cash. You own the vehicle outright and can do what you want with it, including selling it when you want.
Cons
Outright purchase takes a hefty chunk from any business’s cashflow. The vehicle becomes a depreciating capital asset in your accounts and could become a rusty, unreliable problem that is your responsibility to sort out.
Getting a loan
Pros
You can spread the cost over time. It works best if you shop for the best interest rates then approach dealer for ‘cash’ discount. You own the car.
Cons
Avoid old-fashioned HP deals where payment default results in vehicle re-possession. It’s unlikely the dealer will offer the best finance rates available. The vehicle will depreciate while you are still paying off the full purchase price.