When car leasing makes more sense than purchasing
A new car is probably the second biggest purchase of your life. However, that purchase also comes with long-term maintenance costs and fees that add up over time. But what if you didn’t have to actually spend money purchasing the car when you could lease one instead? What benefits do you have from leasing a car instead of purchasing one outright? Well first, let’s establish just what leasing is first, then explain the benefits of leasing a car, rather than purchasing one outright.
What is leasing?
Leasing a car is a similar prospect to renting a property. You pay a set fee per month for use of the vehicle for a fixed period of time. Like a property, you will often be given some form of coverage for maintenance, such as services and yearly inspections. And like a property, you are still liable for the general maintenance of the condition of the vehicle and responsible for reporting issues and taking it to the correct experts, as directed by the vehicle leasing company. Unlike a property, however, you usually don’t get the chance to hold onto the vehicle for much longer, after your leasing period has ended. You will be required to hand the vehicle back to the leasing company.
Why would you lease rather than own?
Usually, the biggest reason is cost. Especially if your only option to buy a new car is to purchase it outright. Not having to pay a lump sum for a new car can be quite attractive. If you want a brand new car every 2-3 years leasing is also a great alternative to purchasing a car as you know that you will be guaranteed something new when your lease is up, providing you have up-held your end of the contract. This saves the hassle of re-financing a new car and having to sort valuations for your current one.
Leasing is also great if you only need a vehicle for a short period of time as well. If you require a car for only a maximum of 12 months to cover a new employee for your business, for example, you can find a leasing company that will provide you with an agreement for such a period, rather than purchasing a car you will be stuck with.
What are you responsible for?
Leasing can often be cheaper in the long run as you often don’t have to pay for servicing or repairs for issues that aren’t your fault, as these are often covered in the leasing agreement. You are responsible though for certain parts of the upkeep of the vehicle, such as fuel, oil, and other fluids. Often a lease agreement does come with lower monthly payments compared to financing a car for ownership and you don’t have to pay off a large lump sum at the end of the financing period either. You simply give the car back and decide whether or not to get another one.
Overall, leasing a car can be a sound financial investment rather than purchasing. Especially if you don’t feel like you have the money to purchase one right now. With hundreds of leasing options that will suit your financial situation and time constraints, your chosen leasing company is bound to find one that suits you.