Leasing a car is an interesting thing to discuss. That’s because there are so many benefits attached to choosing it as a way of getting a car, yet it remains pretty unpopular with people. So, why is that? The most likely explanation for it is that people like to feel the security of ownership, and you just don’t get that with leasing.
But that doesn’t necessarily mean you should rule out. When you’re on a tight budget, and you’re trying to save money in whatever way you can, you should consider every option open to you. Let’s compare the benefits and drawbacks of buying and leasing a car.
Buying a car, whether it’s new or used, means that you own the car, and no one can take it from you. If you choose to sell it, you keep every penny to use as you wish. And, if you don’t rely on a loan to make the purchase, you won’t have to worry about monthly repayments. The car will be all yours, and you’ll have nothing to worry about. You don’t get that security with a leased car.
Some lease deals include things like mileage limits that restrict how much you can use the car. This can be a pain if you find yourself using the car more than you expected to, but with buying you don’t have to think about this. You can also do whatever you want with the car when you own it. You’re free to add modifications and make upgrades at will.
If you buy a new car, it depreciates quickly, and the burden of this will fall squarely on your shoulders as the car belongs to you. You’ll also have to deal with any repair work that needs to be done, and pay hefty charges and down payments to dealers when you buy.
The first thing to say when we talk about leasing is that it’s not just a matter of finances. There are other benefits of leasing. It’s an option that particularly appeals to the kind of people who like to feel like their car is new and fresh because it allows them to regularly upgrade to a new one with no fuss. Whereas if you buy a car you’re tied to it for longer, or you have to go through a long selling process.
That’s not to say that there aren’t financial benefits to leasing a car too though. If you take out a loan to buy a new Mercedes Benz, those monthly loan repayments will almost always be higher than the cost of leasing one. And because you’re almost always driving new cars when you lease, there’s much less chance of facing maintenance costs. And when you do break down, you’ll probably be covered by a warranty anyway.
There are a few financial drawbacks to take into consideration though. Firstly, any changes, including depreciation, to the car’s value or condition, might be passed on to you via rising monthly installment charges. You’ll also probably have to pay a fee each time you trade in the car.
If you’re someone who likes to change your car often, leasing could be the ideal option for you. But if you’re looking for security and permanence, make sure you buy.