The decision to get behind the wheel of a new car is a big one, and there is more to consider than the actual car. Transport is one of the highest areas of expenditure for Brits, with 14% of our income being spent on this; housing costs come a close second. If you’re in the market for a new car, it’s worth weighing up your options – and not just between makes and models. How you decide to get behind the wheel can have a massive impact on your pocket. Below we take a look at the pros and cons of owning a car, and the different ways to drive the car of your dreams.

Buying Your Own Car Outright

If the idea of saving up tens of thousands for a new car is laughable, you’ll probably consider some sort of finance option. Personal Contract Purchase (PCP) is the most popular choice, although Hire Purchase (HP) and taking out a bank loan are also options.

PCP means you get behind the wheel for a fixed monthly payment. Similar to a lease agreement, you’ll be expected to pay an upfront fee, return the car in a good condition at the end of the period, agree to only travel a fixed number of miles each year and you might incur extra charges if you collect any bumps or scrapes. If you decide to keep the vehicle, you’ll need to make a final balloon payment.

HP, on the other hand, is a little more like a mortgage on a house. You pay an initial deposit and agree to pay the rest in monthly instalments – plus interest. Once everything is paid up, the car is yours, so there’s no need to worry about bumps and scrapes, the condition the back seat gets in when the children are eating ice-cream or a final balloon payment.

A bank loan is pretty similar to the HP option, except there’s no initial deposit. Travel as far and wide as you like, all the bank wants is the regular monthly payment, even if you write the car off and are left without wheels.

Owning a car means you’re liable for the cost of maintenance, repairs, insurance, road tax and if you decide to sell the car when you’re done (if it’s yours) you’ll also swallow the depreciation loss.

Consider Leasing a New Car

If you want to keep your monthly payments low and have no intention of driving the same car for the next decade, leasing could be the best and most cost-effective option for you.

Leasing a Mercedes-Benz C-Class Saloon over a three-year period costs around a third of what a PCP agreement would – and the restrictions are pretty much the same. However, with a lease agreement from Mercedes on Lease, you’ll also be covered for road tax, roadside assistance and have a warranty for the entirety of the agreement*.

Owning a car, the Pros and Cons

Pros:

• The car is yours
• You can drive as far as you want
• You can customise your wheels and be unconcerned with scratches, bumps and condition
• You have the option of keeping your car for years or trading it in for another when you like
• There are no end of agreement charges (PCP not applicable)

Cons:

• The car is yours, along with maintenance, repairs and road tax costs
• You’ll have to pay for a yearly MOT
• You’ll be responsible for selling or disposing of it when you want something else
• There will be post-warranty repair costs
• When it comes to selling, you’ll lose money

The Pros and Cons of Leasing a Car

Pros:

• Monthly payments are typically lower than finance options
• You’ll get to experience the thrill of a new car every few years
• You’ll be protected by the manufacturer’s warranty
• You’ll be covered for road tax, roadside assistance and MOTs
• You can elect to include maintenance
• You needn’t worry about resale value

Cons:

• The car is not yours
• You have to maintain the vehicle to a reasonable standard inside and out
• You’ll need a regular income source to cover payments
• You’ll have an agreed limit to mileage

*All Mercedes-Benz manufacturer warranties cover the first three-years of a vehicle’s life. Leases lasting more than 36 months do not include an extended warranty period.