Most of the people who want to own a new car or add to their fleet of vehicles face a dilemma, “Should they lease a car or buy a new one”?
There is no uniform answer to this question as what suits you best depends on your personal requirements. Car leasing has become a popular choice for many who want to keep pace with the latest launches in the automobile industry. More and more of the potential buyers find car leasing a smart option as compared to making an investment for a new vehicle.
Buying a car gives you more freedom as you own the car straightway either by paying cash or obtaining a loan. However, if you fail to pay the loan you may lose the car or money.
Before deciding on what is the better option for you, you need to look at both the option closely. Here is a comparison between the two:
What is car leasing?
Car leasing allows you to own a car, though for a certain time being, without requiring you to splash a lot of cash. Car leasing gives you an opportunity to avail the luxury beauties that you are less likely to afford in your lifetime. Though it is a better alternative to car purchasing, still there are several important factors to consider before you take a decision.
Benefits of Car Leasing
Personal car leasing has many benefits. Here are some of the perks of leasing a car:
- Whenever you buy something, you have to pay the entire price outright. However, with car leasing, your experience will be way different. When you own a car on lease, you are required to pay only a portion of its value.
- Personal car leasing never refers to the transfer of ownership title, you are only permitted to use the car for a particular time by paying a fixed monthly charge as decided between you and the car leasing company.
- Personal car leasing sounds a good choice for those who want to enjoy the ride in the latest models but are not in a position to afford them. So, if you want to update your car every time there is a new launch in the market, car leasing sounds the right thing for you.
- Car lease deal allows you to go with a regular vehicle upgrade. Most importantly, you can drive or ride the newest model without having to pay for the entire car value.
Drawbacks of leasing a car
There are a few drawbacks of leasing a car:
- There are some leasing deals that require you to pay out a larger sum upfront. In that case, car acquisition through leasing is not a cut-rate alternative and edges close to car purchase as far as total cost is concerned.
- There are some deals which have restrictions regarding car mileage. If you cross the limit, you have to pay extra, which would make the deal more expensive than expected.
- As you are not an owner, you won’t be allowed to make any change that might be required or feels necessary to ensure more comfort. When it comes to car leasing, always make sure to deal with a reputed car lease dealer, otherwise, you might end up paying more but getting too little.
Buying a car
Buying a car is a simple and straightforward method most are familiar with. Depending on what suits your budget you can buy a car. You either pay in cash or get a loan to buy the car. Buying a car means you own the car fully.
Benefits of buying a car
- The benefits of buying a car are the obvious one – you own it, unlike the leased car.
- Another benefit is that you have full freedom to use the car as you want. You can add features and make your car as comfortable as you want.
- You can sell the car anytime you want as you are not locked into any kind of contract.
- The insurance premium is generally lower when you buy the car as compared to the leased car.
Drawbacks of buying a car
Buying a car also has some drawbacks:
- Monthly payments in case of bought cars are higher than the leased ones. The lenders usually expect heavy down payments and then monthly installments.
- The value of the car decreases as the days pass by and you still have to pay the installments even when the car has become worthless.
- Maintenance of the car adds to the overall cost of the car even when its market value if decreasing.
The Bottom-Line
Depending on what your current needs are you should opt for either leased car or buy one. Leasing a car comes with a benefit that you can switch cars and enjoy driving in newer models. The flexibility you enjoy with the leased cars is absent in buying a car.