Buying (ownership) vs Leasing (usership) – Which should you choose?

At this stage it is always best to speak to us directly so you can be satisfied you have answered all the questions you have and to ask and more besides. If the thought of reading this information causes a glazed facial expression, please call us now to discuss!!! Alternatively you may wish to read the information below to help provide some food for thought.

There are many ways to acquire vehicles but they can all be grouped into two separate types of agreements. Some businesses and individuals either like to feel they own their vehicles or at least have some equity in them. Lets call this group Ownership Agreements. Alternatively, other businesses or individuals like to just rent them and give them back with total disregard for their monetary value. Let’s call these Usership Agreements.

Ownership Agreements

Many businesses and individuals have strong feelings against just renting/contract hiring vehicles and they prefer to finance vehicles where they like to feel they will eventually own a vehicle outright or at least be amassing some equity in it. Monthly payments are usually more (they have to be otherwise you wouldn’t be paying any of the capital back to the finance company) but the satisfaction that you will eventually own the vehicle, or at least have some equity, is more appealing than contract hiring. Typical ownership agreements are hire purchase, finance lease, bank loan, lease purchase.

Usership Agreements

On the other hand, the most popular reasons why more and more businesses and private individuals choose leasing to acquire vehicles is that they don’t like how much money vehicles depreciate. They would rather have a low deposit and lower fixed monthly payments for a given period of time and then hand it back. Vehicles will lose between 55% and 75% of their value over a 3 year period depending on the make and model. When you add up what you pay over the period on a leasing agreement the total paid will approximately be the same as the value / amount of money the vehicle has lost in the same period. Typical usership agreements are contract hire and personal contract hire.