Depends what you want. In my opinion you need to consider the following:

Leasing - you rent the car for a period of the lease (car is owned by the leasing company)

pros - lower monthly repayments; possibly lower inital deposit

cons - mileage charge for excess mileage; if you decide you wish to own the car after the lease - can you afford the 'balloon' payment (guaranteed future value); if you decide to change the car after the lease, will there be any equity in the car to go towards your deposit for the new car (ie at the end of the lease, is the car actually worth more than the GFV, in which case you have some equity; if it is worth the same as the GFV, no equity; if it is worth less than the GFV, negative equity - you need to make up the difference between the car's actual value and the GFV).

Personal loan -

pros - you own the car from day one; can change the car at any time (you'll still be liable for completing the personal loan);

cons - higher monthly repayments

Hire purchase -

pros - you own the car once the final payment is made;

cons - hire purchase company own the car until you make the final payment; if you want to change the car partway through the agreement, need to clear any outstanding finance first; higher monthly repayments

Have a look at HJ's Finance Guide - http://www.honestjohn.co.uk/guides_finance/

Edited by Auristocrat on 27/02/2013 at 10:15