REGARDLESS of your income, buying a car will be one of your biggest financial outlays proportionate to your earnings. There is the initial cost for the car, the insurance payments, road tax, service charges and so on, but could leasing a car instead be a better option? Check out the merits of leasing vs buying.
According to recent reports, more people than ever before are choosing to lease new cars rather than buy, with the introduction of more accessible personal contracts. With this in mind, today’s blog post will focus on how to decide whether leasing or buying is the right option for you.
When is it right to buy?
There are two main circumstances where it is better to buy, and the first relates to how much you drive. If you drive a lot, leasing companies charge extra for each mile that you drive over the amount on the lease agreement.
If you know that your job or lifestyle requires you to drive a lot, then it’s possible to negotiate the terms of your lease to include it, or to opt for a specific business contract. However, in most cases, investing in a new, high quality car will be a cheaper option in the long run.
The second circumstance where buying is the better financial option is in relation to how hard you are on the car itself. If you’re a new or young driver, you may be more prone to getting scratches on your car from lack of experience.
Or, if you regularly drive on unknown roads, you will be at a higher risk of damage. In such cases, a lease is not likely to be a good option for you, due to the wear-and-tear penalty fees, which vary depending on the company and the lease agreement.
When is it better to lease?
If you’re looking to lease cars instead, then it might be that you fall into two other categories. On the one hand, if your budgets are tight, leasing often means lower monthly payments when compared to financing a car.
This is because, with a lease, you’re paying for the depreciation of the car as the years go by, but when you buy a car on finance, you pay for the whole vehicle cost at one set rate when the car is new.
On the other hand, leasing is often a very strong option for a more flexible lifestyle. For example, if you live in the city and only need a car to take trips away at the weekend, the monthly costs of running a bought car are completely unnecessary, and the convenience of leasing far outweigh them.
This is especially true if you move to a city for work or university and only plan on being in the area for a few years. Plus, you don’t have to concern yourself with selling the car at the end of the agreement.
We hope you’ve found this article useful in helping you to decide whether to buy or lease. Which option did you go for? Let us know in the comments below.
