Buying a car is cheaper than renting in the long term

A motoring column in The Telegraph has advised motorists that buying a car is actually cheaper than leasing one in the long run.

Writing for The Telegraph Mike Rutherford takes Vauxhall as an example. He explains that leasing an unused Corsa 1.3 diesel, complete with alloy wheels and air-conditioning, would cost consumers three month's rental in advance, which is £627, followed by 35 further monthly instalments of £209. Over the three years of the contract hire arrangement, the customer would pay £7.942.

However, Vauxhall has imposed a penalty that would see any motorist fined if they drive over 6,000 miles each year.

A Vauxhall dealer was selling delivery-mileage Corsas with 1.2-litre petrol engines, alloys and air-con, for an advance payment of £500 followed by 60 monthly payments of £175. That works out as £10,986 in total over the five years.

First and foremost, Mike Rutherford points out that after three years the person leasing the car must return it. The person who bought a car has paid it off after five years and, if they desire, can make about £3,000 by selling a car after using it for five years.

If you subtract the £3,000 made by selling a car, it will actually cost the buyer £1,600 for each year he buys the car. The person leasing the car must pay £2,647 per year, alongside insurance, fuel and maintenance costs. Even before you subtract the money saved by selling a car, buying it would still cost less each year, hitting £2,200.

"I'm not against rental, leasing or contract hire," wrote Mike Rutherford. "But for the typical, non-business motorist who's thinking medium to long term, buying and owning has to make more financial sense than renting or leasing.

David Simpson, Wetherby, Mini Cooper

Diane Bellanca, Accrington, Toyota Auris TR VVT-I