Should I Lease Or Buy A Luxury Car?

Date Posted 14th July 2021
Read Time 5 min read
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Luxury cars are often seen as a complete indulgence. With their slick exteriors and plush interiors, they feel more, well, just more luxurious.

But there’s more to the luxury car than their look.

Luxury cars are built to give you the best experience. To make your life that little bit easier. From heated seats to upgraded entertainment systems, the luxury car is an experience.

For many, the luxury car is a dream. For others, it’s a reward. Either way, with leasing it’s a possibility – but is it the best way? We take a look at owning and leasing a luxury car to see which came out on top.

Affordability

Most of the decision of whether to buy or lease a luxury car will come down to finances. It’s not that simple as looking at how much the car is priced, as obviously there’s a range of costs that come with driving any car.

But let’s look at that upfront cost first of all.

Take the Mercedes Benz A-Class Saloon as an example. You could buy this for just under £24,000. If you have the cash, that’s great, but most don’t. And even on a 0% APR hire purchase agreement over five years – which is hard to find on a luxury vehicle – your monthly repayments are going to be £400. 

Meanwhile, you could lease an A180D Sport automatic saloon for around £270 a month with a deposit of £2,430.99.

So, leasing is certainly a more cost-effective way to get your hands on a luxury car. Not only that, but once you’d finished leasing the car, you can hand it back and lease another if you wish. 

This brings us to the next point.

Depreciation

Luxury cars top the list when it comes to most things, and they’re by far and away up there when it comes to depreciation too.

As soon as you drive your shiny new luxury car away from the showroom, it’ll start to depreciate. And probably quite a lot. 

The problem with depreciation is that it typically works in percentages, so is incredibly noticeable when it comes to higher-priced cars.

Let’s pick on Mercedes again. You could purchase the S-Class Cabriolet for £125,000 on a three-year hire purchase plan for instance. After those three years have passed, you own the car except now the resale value is £30,300. So that’s a price drop of around £94,000 – or over £30,000 a year.

When you lease a luxury car, depreciation doesn’t factor in, because you never own the car.

Of course, depreciation is only really going to be a problem when you come to sell. So the most important questions you need to ask yourself are how much you care about owning the car and if you’re happy to bear that burden of depreciation? 

Some brands hold their value better than others too, so if you’re looking to buy a luxury car as an investment, make sure you do your research first.

Restrictions

One bonus of owning a car over leasing is that it’s yours to do with what you wish. 

You can drive it for however long you want, however far you want. You can customise it to your individual needs. And if you damage it, it’s only yourself and your bank balance you have to answer to.

Leasing a luxury car comes with restrictions meanwhile. Mileage is a big one. If you exceed the mileage set out in the terms of your contract, you’ll have to pay a pence-per-mile penalty fee when you hand the vehicle back.

You’re also expected to return the car in a similar condition to how you received it. This means you can’t modify it (without the lease company’s permission) and any damage above and beyond fair wear and tear will see you with a repair bill at the end of your contract.

Maintenance

Even the most affordable luxury cars are made with more expensive materials. This means, when it comes to repairs and maintenance, this is a cost that needs to be factored in.

With a lease car, you can get a maintenance package that will cover you for the length of the lease. Unexpected repairs can be incredibly costly with any car, but a luxury car can be even more so.

Owning a luxury car is a coup, and with some models, it’s even an investment. New luxury cars don’t stay new for long, though, so if you like the idea of owning a brand new luxury model every few years, then leasing is probably right for you.

Is buying or leasing a luxury car right for you

There are advantages and disadvantages to both buying and leasing a luxury car. Whichever you decide will ultimately depend on your finances and your circumstances. 

However, either way, you will get to drive a luxury car, which in itself can be a priceless experience.

Buying a luxury car

  • You own the car and it can be an investment
  • When buying on finance, you can pay a deposit followed by fixed monthly payments
  • At the end of your contract, the car is yours to do what you want with – so if you want to sell or trade it in, you can
  • If you sell your car, you have to bear the cost of deprecation
  • There are no restrictions on mileage or customising the car, as it belongs to you
  • You’ll need to factor in extra costs such as road tax, maintenance and servicing

Leasing a luxury car

  • You don’t own the car and must return it at the end of the lease
  • Low monthly payments, as you’re only paying for the car’s depreciation over the term
  • It can be costly to end a lease early unless you can agree to an early trade-in
  • The future value of the car won’t affect you financially, as you don’t own it
  • If you go over your mileage allowance or damage the car, there’ll be penalties to pay at the end of the lease

If you are looking for your own luxury vehicle to lease, we have a large range of makes and models available to browse online by clicking the button below.

Or why not ‘Apply Now’ for a decision in minutes.