Buy car or lease and invest the cash

[NeedMoreSun]

Looking to spend between £6-8k, would possibly go up to £10k if it made sense. I'll need this car for the next 5 years at least. In the past, I've always bought a car with 40-50k on the clock and then run it into the ground.

What makes most financial sense, buy outright or get a lease (is that the right term) that includes servicing costs etc and invest the remaining money?

I'm swaying towards buy outright as it won't reduce the monthly outgoing and I'll need to remortgage soon. But wonder if I'm missing something obvious as so many people seem to lease cars.

I wouldn’t lease, over 3-4 years you will pay the same amount of money as paying outright and not have a car at the end. A lot of people lease through a limited company to claim back against tax.

If you can get a loan with a lower interest rate than what you think you can make investing do that but it’s risky.

I bought a 3 year old car for 11k (half cash half loan) 2 years ago and it’s been fab, no issues and I can get almost the same amount back if I sell it.

I'm looking for the low risk approach! The limited company tax thing makes sense but not applicable for me. Looks like buying is the way to go.

Cars are money pits whatever you do. If you buy it likely won't be worth much by the time you are done and if you lease you are throwing money away and have little to show for it. I always think buying is better because I got stung with a car loan once where the car was written off and worthless but there was still debt to pay. Never had a lease so not sure if the same would apply. At least if you buy it you aren't committed to regular payments.

We had several cars on PCP, pretty nice cars that we wouldn't have been able to afford otherwise tbh.
It gives you the option to return the vehicle, upgrade it for another, or make one final payment to own it.
We upgraded several times but after covid we returned our most recent one (bought a campervan) and they gave us £6k back.
PCP is not for everyone so look into it first

I'm not fussed about new and shiny, I live in a city so the car is prone to scuffs and dings which I would never bother to repair because they will just happen again.

Would I have to get them repaired if it was a PCP? Presumably I'd get charged or the end value would be dropped?

@NeedMoreSun
You're allowed some fair wear and tear but additional damage that's not just from normal use you could be may be charged for.
You'd need to pay for the regular service, maintenance, repairs and basic upkeep such as oil changes etc.