00:00When making your decision on the best option, there are a number of different financial and
00:04non-financial factors to consider. With leasing or the PCP option, one of the pros is that it
00:09gives you flexibility, you're able to switch or upgrade your car after a few years, and you don't
00:15have the hassle of having to sell your car. And if you're looking to get a more expensive car,
00:20which can have high depreciation values, then it can make more financial sense to lease rather than
00:25buy. And often maintenance issues are covered by the dealer under lease agreements, but check your
00:30contract on this. One of the cons of leasing is that you need to keep your car in perfect condition,
00:36otherwise you get charged when you return it to the dealer. And there are restrictions with these
00:40options as the car is not yours to keep. For example, there can be restrictions on the amount of
00:45mileage that you can do. And if you exceed the threshold, then you have to pay more. With the
00:49finance hire purchase option, some of the pros are that you can own a car with limited upfront costs,
00:55once you've paid off the car, you don't have the stress of the ongoing regular payments and you
01:00have full ownership. So you don't have the restrictions associated with leasing. However,
01:04the con of financing is that interest payments can be high, which can take up a large chunk of your
01:09disposable income each month, making it difficult to save anything on top. You also have maintenance
01:15costs associated with ownership, which tend to increase as the car gets older. The final option,
01:21buying the car outright has the benefits of giving you peace of mind, you own the car fully, and you
01:26don't have the restrictions or the stress of making regular monthly payments after you've purchased it.
01:32This option can work well for people who don't mind driving the same car for five, eight or over 10
01:37years. However, as I've said before, the main con of buying a car outright is needing to pay large amounts
01:44of money upfront and the opportunity cost of using that money to invest. As well as this, cars are in
01:51general a depreciating asset unless you really know your stuff and have something like a rare vintage car.
01:57One way to try to mitigate this is to buy a secondhand car, which is already partway down the depreciation
02:03curve at someone else's expense.
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