Lease vs. buy

Are you still deciding whether to lease or buy your next company vehicle? We’ve listed the most important differences between leasing and purchasing outright to simplify your decision.

Lease or purchase outright?

Companies looking for a new vehicle are often faced with the question of whether to lease or buy. We’ve explained the most important differences between the two forms of financing.

Initial costs
Leasing With a lease, initial costs are usually very low, and in many cases you can choose whether to make a down payment or not.
Buying When you buy a car, you have to pay upfront or take out a loan, which means higher initial costs.
Balance sheet
Leasing Lease instalments are fully tax-deductible as business expenses because the leased asset is recognised in the lease company’s balance sheet.
Buying The owned car is recognised in your balance sheet as an asset. Only the depreciation on the vehicle over the statutory useful life is tax deductible..
Financial planning
Leasing A lease with fixed monthly instalments offers more financial planning security. You can also plan more effectively because you don’t need to budget for unexpected costs.
Buying When you own the car, you need to plan for unforeseen maintenance and repair costs that may not be included in your budget.
Residual value
Leasing The lease provider generally bears the residual value risk. You don’t have to worry about remarketing the vehicle at the best price.
Buying You bear the residual value risk as the owner of the vehicle. What’s more, you have to ensure that you achieve the maximum possible sale price for the vehicle on the used car market.
Flexibility
Leasing When you lease, you can be flexible about selecting the term of the lease and the vehicle mileage. A lease contract can be tailored to your mobility needs and preferences.
Buying You can use your car for as long as you want and sell whenever you like.
Upgrading to a new model
Leasing Companies that lease cars usually upgrade to newer models sooner, which means you always have new cars with the latest technology in your fleet, something your employees will also appreciate.
Buying The depreciation period means that purchased vehicles are generally driven for much longer.
Services and administration
Leasing When you lease, you can opt for one-stop service from your lease and fleet management partner. They handle everything vehicle-related: from delivery to return.
Buying When you purchase outright, you may need to obtain services from different providers and organise everything yourself, which means your vehicle management time commitment is greater.