Leasing normally means lower monthly payments than HP as you are paying depreciation (estimated) and interest on whole amount. With HP you pay Capital and interest on the whole purchase price less deposit.

Leasing can be sunstantially cheaper if the Leasing Company has a special offer on a make or model - Big order they may get 40% off rather than your 10/12.5% for one car. Hence the depreciation will be less and the interest+profit on the smaller Capital cost can mean a good deal for the punter.

However, break the contract early, do higher miles than forecast and return a car in other than very good condition then the penalty charges soon mount up.

My plan is buy a new or very nearly new reliable Make (Japanese) car cash, at a good price and look after it - last car for work I owned my employers bought it 2 x over in the 93,000 miles by Monthly Car allowance and 25p/ml for all miles + tax rebate on 1st 10,000 miles - driven carefully 38mpg was possible whne petrol was 80p / litre and not the £1.14 of today.

I've just had my third car delivered through lingscars.com. I'm self employed and do about 20,000 miles a year, and like having a new car every so often, but don't like the idea of having a depreciating asset sitting on my drive haemorrhaging my money.

My current deal is for a car worth £28,700 list, which costs me under £400 a month for 3 years. A loan would probably mean repayments of double that per month, tying up my money for 3 years then hoping to get a trade in or private sale of £10-12 grand.

This keeps everything simple for me, it won't suit you if you like driving old cars or won't be such a good deal if you're not VAT registered though.