Leasing guides

Used vs new car leasing: Which one’s the better deal for you?

Understanding the Difference Between New and Used Car Leasing

Leasing is a popular way of getting behind the wheel of a new car. Whether it’s a brand-new car or a used one, leasing is a flexible way of paying for a vehicle and gives you the ability to see your monthly payments clearly.

While leasing is more commonly thought of as a process for buying a new car, it’s also available on used models - but what is the difference? Let’s take a look and see which one could work for you.

New Car Leasing: What you need to know

Leasing is a form of finance, which means you never actually own a vehicle. Instead, it’s best to think of leasing as long-term renting. Often cheaper than an equivalent Personal Contract Purchase (PCP) finance agreement, leasing brings a small initial deposit followed by regular monthly payments. In fact, in most instances, that initial deposit is far lower than the one you’d pay for a PCP deal, making starting an agreement much easier.

When leasing a new car, you’ll get access to the latest models with cutting-edge technology, and they’ll be accompanied by a full manufacturer’s warranty. With AA Lease, road tax and free UK delivery are included, while a range of maintenance packages are available to choose from in order to find the right setup for you.

Once you’ve reached the end of your lease agreement, you simply hand the car back to the vendor and walk away. From there, you’re free to lease a new vehicle should you want to.

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Used Car Leasing: What you need to know

Though not as well-known as new-car leasing, it’s also possible to lease a used car should you want to. Compared with new-car leasing, this option brings lower monthly payments - since the value of the vehicle is lower - though the availability is less and you won’t be able to get some of the features that you’d find on a brand-new model.

Like new car leasing, you can still find used-car lease deals which incorporate road tax, warranty and servicing costs to help bring all of those motoring expenses into one monthly cost. As with a new car lease, you’ll pay an initial deposit followed by regular monthly instalments over a pre-agreed period. Once you’ve reached the end of your lease agreement, you simply hand the car back to the vendor and walk away.

Key differences between Used and New at a glance

Here, we highlight the major differences between Used and New to help you make your decision on which form of leasing route to take.

Leasing type	New car leasing	Used car leasing
Monthly payments	Greater than used, lower than PCP	Often the lowest of all leasing agreements
Deposit	Usually month’s instalment	Usually month’s instalment
Agreement period	2 to 4 years	1 to 4 years
Vehicle age	Brand new	Usually up to three years old
Mileage limit	Mileage limit set at start of agreement, fees applied if exceeded	Mileage limit set at start of agreement, fees applied if exceeded
Warranty	Full manufacturer’s warranty	Manufacturer’s warranty might be nearing end, could need third-party cover
Tech features	Very latest features	Some elements may be older
Maintenance	Lower repairs costs and often covered under warranty	Chance of more expensive repairs, warranty running out
MOT	No MOT required for first 3 years	MOT will be required if over 3 years old
Business leasing?	Business leasing is possible	Business leasing also possible on used cars
Option to purchase vehicle	No	No

Which One is Right for You?

When to choose new car leasing

New car leasing is ideal for drivers who like to get behind the wheel of the very latest cars. Not only that, but you’ll be getting a car with the very latest technology and in-car features, as well as a full manufacturer’s warranty, which can add extra peace of mind to your driving experience.

Leasing a new car can also prove less expensive than going down the PCP route, while a smaller initial deposit means that you don’t need to bring together a lump sum which is as large. You’re likely to pay more per month compared to a used car, however.

Another plus-point is that once you’ve reached the end of the agreement, you can simply hand the car back and start a new lease deal on another new car.

When to choose used car leasing

Used car leasing is a good option for drivers who aren’t as bothered about driving the very latest cars. That said, you’ll still be driving something which is relatively fresh, it just won’t be as brand-spanking new as you’d get with a regular leasing agreement. Used car leasing is also great for those on a budget, as it’ll bring lower monthly repayments and will likely have a lower initial deposit, too. You’ll just need to bear in mind that your used car might be more susceptible to mechanical issues, and there will be less manufacturer’s warranty left to cover them. However, there are third-party warranty providers out there - including the AA - which can provide cover should you suffer a mechanical issue with your car.

Conclusion

Choosing between used and new-car leasing depends entirely on your circumstances. If you’re after the latest model with all of the cutting-edge tech that modern motoring can bring, then look no further than a new car lease deal. However, if keeping to a budget is more important or if you’d simply like to get from A to B for less, then used car leasing is a great option.

New cars also come with the added peace of mind of a full manufacturer’s warranty and no need for an MOT for several years. However, few used cars on lease schemes are beyond five years of age, meaning that they’re still relatively new in the grand scheme of things.

Whichever you fancy, there’s plenty on offer with AA Lease. Bringing together our expertise in motoring with the very latest lease deals, we’ve got a variety of options if you’re looking to get behind the wheel of a new car for less. Head to our dedicated lease page to find out more.

Or if you need further support then you can contact us.