THE PROS AN CONS OF LEASING VS. BUYING A CAR
November 8, 2017 10:14 AM  |  Posted By: Marcus
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Related Categories: Car dealers

There’s a lot to think about when you’re ready to buy a vehicle. After deciding what car you want to drive, thinking about financing is the next step which may get you thinking of leasing instead of buying. Taking out a car loan or paying cash isn’t the only way to get a new vehicle, as leasing is found in every part of the car industry. In Australia, vehicle prices continue to go up, so people are leasing more. People love options and their situations differ from one individual to another, so leasing is not for everyone, but it has its place in the world of auto finance. Here are the pros and cons of buying and leasing a car, so let’s go through them together as it may help you solve your dilemmas.

Leasing

Pros:

  • Not having to worry about selling and trading used cars

  • Always have a warranty and the latest vehicle safety features

  • Driving a new car every few years

  • Lower monthly payments

By leasing, people can get a vehicle that’s more expensive, but couldn’t otherwise be able to afford. All of these things carry a lot of weight, because having a warranty is a big plus, while the lower monthly payments can be up to 60% lower than the monthly payment purchasing the same car. With a lease, you never have to worry about whether any mechanical problem will pop out after the warranty runs out. If your newly bought vehicle happens to have a mechanical problem.

Cons:

  • Paying more in the long run to get the lease benefits

  • Gap insurance (required by most leases)

  • Having a stable, predictable lifestyle

  • Maintaining your vehicle properly at all times

  • Driving a set number of miles

It is much easier to sell a vehicle you purchased than getting out of a lease contract. You need to meet various terms that leases have- otherwise, you will have to pay fees. The fact that you have a constant payment to think about requires having a predictable and stable lifestyle. If unexpected situations happen, such as a major medical expense or job loss, it can upset your finances greatly.

Buying

So, leasing offers major advantages but there are drawbacks, too. In the long run, purchasing a car could be a better choice, depending on how you use your car and your financial situation. These are the pros and cons of buying a car.

Pros:

  • Driving as many miles and customizing your car any way you like

  • Having ownership of your vehicle

  • Having the option to pay off the loan and stay payment-free for a while

  • Not having to worry about lease-end charges

  • Building in some resale or trade-in value

Having your own car allows you to do whatever you want and not having to fear of any fees. You can customize it and do as much as you want, and you are unlikely to lose in its cost-effectiveness (as long as you’re committed to driving it for a longer period of time).

Cons:

  • Having to sell or trade your car (eventually)

  • Unexpected cost of repairs after the expiration of the warranty

  • Higher monthly payments

The cons are obvious, and accepted by most people in Australia as a fact of life. By having the ownership over your car, you can modify it, have your tyres replaced by reliable cheap tyres in Blacktown, change the interior, get a custom paint job, and improve its performance in different ways.

If you get caught up in the dilemma on whether to buy or lease a car, consider your monthly cash flow, available funds for initial fees and downpayments, as well as how much you drive, and how hard you are on the car. Think about leasing if your monthly influx of money is somewhat lower (leasing downpayments are lower than downpayments for purchasing a car), if you don’t drive that much, and are not prone to damaging your car. In the long run, buying a car is cheaper than leasing. The longer you own it, the more you save in the following years.

 

 
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