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Insight, news and updates from Alliott NZ Chartered Accountants, Auckland New Zealand. The views expressed here are the views of the author and should be discussed in further detail should an article be relevant to your individual circumstances.

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All I want for Christmas is a car: should I lease or purchase

Written by Emma Clare on November 24th, 2014.      0 comments

Introduction

If you're looking to buy a new vehicle and require finance, the salesperson will offer you two options: lease or purchase. Great. So which one is right for you and your business?
 
The most important thing to remember at this point is that over the normal period (usually 3 years) for lease or hire purchase:
 
The overall cost of owning or leasing a vehicle works out to be approximately the same over the three years when all cost factors are taken into account.
 
Leases and hire purchase (HP) or loans are simply two different methods of vehicle financing:
 
  • Leases finance the use of a vehicle,
  • Hire Purchase finances the purchase of a vehicle.
 Each has its own benefits and drawbacks depending on the vehicle user’s own circumstances and tax situation.