Should you own or lease a car? If you lease, why should you? If you don’t, should you? This guide aims to minimise your confusion by assessing the pros and cons of car leasing.
Pros of Car Leasing:
On the surface, car leasing seems to be cheap. You don’t have to pay for the principal amount. Instead, you pay a depreciating price including the running costs. Moreover, the monthly instalments are low as compared to buying. Furthermore, since you’re driving an old car, it is warranted by the factory. Also, you do not have to pay the sales tax. Car leasing allows you to drive an expensive vehicle. Otherwise, you might not be able to afford it. Since you don’t own the vehicle, there are many things that don’t worry you. For instance, the drop in the car’s value doesn’t bother you much. Lastly, if you’re bored with the car, you can drop it at the dealers.
Cons of car leasing:
Firstly, leasing is an expensive option in the long run. Because you pay a constant price for a depreciating vehicle. Moreover, lease contracts specify a mileage limit. And, if you exceed those, you are fine. But, you do not receive a bonus for the leftover miles. Hence, eventually, car leasing is a disadvantage. Furthermore, the vehicle has to be kept in good condition. If you fail to do so, you are fined a hefty amount. Also, you would not want to terminate your lease contract before time. In case you do, you would have to pay an exorbitant amount in taxes and fines. Lastly, the car has to be returned in its initial brand new condition.
Buying a car is a tricky business, it is confusing. Therefore, before making a final decision, it’s best to assess all your options.