Which is better: to buy a car or to lease one? Well, it really depends on what you want to use the vehicle for.

If you are self employed or use the car for the production of income, you could consider a lease as you can claim the installment as an expense against your tax bill.

However if you have a car allowance, it is considered a fringe benefit and it is taxed as such. So at the end of the day the tax break is negligible.

Many self-employed people justify expensive leases because of the so-called tax benefits, but at the end of the day, the higher interest charges largely negate any tax benefits.

Nowadays anyone can have a lease, whether you are self employed or not; it just means that you do not have to pay a deposit (you can’t claim from tax if you don’t use it for production of income).

If you buy a car, you can depreciate the vehicle at 20 percent per annum. While it's a relief not to have to come up with a 20 percent deposit on a car, it means that your interest charges and payments will be higher.