Car Leasing or Buying: Which One to Choose? Find Out Here!
by Arina Smith Automotive 27 October 2021
The automotive market is expanding day by day. The rapidly-increasing global economy arguably is one of the significant contributors to that. Keeping that in mind, car manufacturers and dealerships are sparing no effort to promote vehicle sales
One of the hottest trends in the modern automotive market is leasing a car instead of buying.
Simply put, leasing is just a synonym of “renting”; both work the same way. You sign a lease contract with the dealer for a specific period (generally between 36 to 48 months). You deliver monthly payments to the dealer, and when the contract ends, you return the car to the dealer.
So, is leasing better than buying when it comes to a car? We have mentioned the pros and cons of both aspects to help you make an informed decision.
Take a look.
Why Leasing a Car is Better than Buying
Lower Monthly Payments
Leasing may seem tempting as the monthly payments are way lower than the monthly installments of a loan. It allows you to skip the interest calculations and enables hassle-free leasing.
You simply have to pay the monthly payment, which is mentioned in the lease contract, and that’s it.
Hassle-free Switching
When it comes to leasing a vehicle, you can simply return it to the dealer after the leasing tenure hits and get a new one with another lease contract. This works great for people who want to switch cars every 4-5 years and don’t want to own a depreciating asset.
You can do these while keeping the payments steady, which is not feasible when buying a new vehicle.
Skip the Resale Hassle
You have to return the 4-wheeler to the dealership and get done with it. There is no need to find buyers and get involved in long negotiations.
Similar Reads: Effective Ways to Diagnose Car Engine Problems
Why Buying is Better Than Leasing
You don’t Build Equity
Leasing a car doesn’t let you enjoy total ownership over it and thus does not build any equity. This means your leased 4-wheeler doesn’t influence your net worth, and you can’t sell it since you have no ownership over the asset.
Range Cap
The dealership will let you drive your leased car for only a specific range mentioned in the lease contract. Exceeding that limit can lead to serious penalties at the time of returning the automobile to the dealership.
Mostly Involves Hidden Charges
Hidden charges are something that dealerships often disclose to the customers while signing up the lease contract. One of these charges includes the car’s wear and tear costs.
Dealerships mostly allow normal wear and tear to the vehicle. But if it exceeds that limit, they can make more money from you in the end.
The definition of “normal wear” depends on the dealership, location, and a few other factors. Make sure to get a concrete idea of “normal wear” from your dealership before leasing a car.
Ensure Your Car – Whether You Buy or Lease it
Irrespective of whether you buy or lease it, it becomes your property. If you get involved in an accident or anyone is harmed because of your vehicle, you may land yourself in legal trouble and bear the financial costs associated with the accident.
This is why buying appropriate coverage makes sense. Consider embedded insurance – it offers adequate and customized coverage as per your needs and when you need it the most. The biggest benefit of this insurance type is that you get customized quotes from various insurance carriers, so you have several options to compare.
You can read this embedded insurance guide to know more.
Final Word
So, is leasing better than buying? Well, it depends.
If you’re a short-term user who won’t be going on long trips and don’t mind not owning the car, leasing can be a better option.
However, if you plan to use your automobile for an extended period and want ownership, buying a vehicle may be a better investment. It’s safe to say that everything boils down to one’s requirements and usage patterns.
So, what is your preference? Let us know in the comments!
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