18 Mar Is it better to lease a car than to buy it?
At some point in your life, you might be in need of a new car. Investing in a new car is a major deal and one that requires weighing out various options before making any big decisions. One option that is worth considering is car leasing. It has various advantages and a few disadvantages but, much like renting your home instead of buying one, it can be beneficial in the long run.
What is the difference between car leasing and buying?
The difference between buying a car and leasing one is quite simple. In one case, ownership of the vehicle is yours and in another, you are setting up an agreement with a dealer to drive their car longterm. As such, when you buy a car, the burden to sell it when it reaches its peak is yours, unlike the latter option which allows to return the car to the dealer and set up new leasing deals with a different car.
Before you can conclude which option is the better, there are a few things you have to keep in mind:
Car leasing tends to offer reduced monthly costs compared to regular car finance. Even if you choose to take out a loan in order to buy a car, you are still likely to pay more per month than you would on most leasing deals. In this case, if you are looking to save more money during the month then leasing might be the better option.
Leasing agreements often come with a maximum total of kilometers you can drive before having to pay extra. Should you go beyond that mileage, there’s a great chance that you will be paying extra per kilometer. If you can negotiate a deal with the leasing company, you might be able to pay for extra mileage upfront and save costs but, that is not guaranteed. As such, owning a personal car might be cheaper.
I’ll be honest with you and admit that driving your own car comes with a certain freedom that no other option offers. If you scratch your car or are involved in a crash, you have no one to answer to but yourself and your insurance company. To top it off, personal ownership offers you the chance to use the car for various purposes both business and personal. Car leasing is not as free and comes with several rules and fees that can leave you feeling stinted. Regardless of how long you have the car in your possession, you will always have to answer to the dealer or leasing company if you scratch or crash the car or if you plan to use it for any other purposes other than those agreed upon.
Upfront, leasing seems cheaper than personal car finance. It offers lowered monthly costs and seems favorable for people looking to drive a car for a shorter time frame. However, when you consider the restrictions it imposes on drivers and the addition of extra fees for non-compliance, it might be a cheaper, better decision to purchase your own personal car.