There are some distinct advantages and disadvantages to leasing a car compared to simply outright buying it. The choice of which avenue you choose to go ultimately depends on your current, individual situation and where you are financially. Today we will explain how car leasing works, what the advantages and disadvantages are, and how leasing a car may be beneficial to you.
How car leasing works
If you were to buy a car, you are free to use it however you please. However, you’ll also be responsible for covering the costs of any repairs needed - and repairs are always inevitable given time and wear and tear - and any servicing to keep your vehicle in top shape. This cost can, of course, be mitigated by insurance, but that is, again, entirely your responsibility to make sure you are still covered by warranty.
If you finance a car, you’ll own it just like above, at least once you’ve paid off your loan. In both cases, you’ll be free to sell or trade it in once you’ve run your course with it.
Leasing a car means you don’t own it. You are renting it by paying a fee to the owner so that you can use it for a set time - usually two to four years. You will have to sign a lease agreement with a lessor and make an upfront payment. This payment will usually be less than the down payment if you were to buy outright, which is the main advantage.
The main reason people lease instead of buy is the financial situation. The monthly payments for a lease will typically be much cheaper than a monthly car loan, so you could end up driving the same car for a much lower price with a lease. You’ll also have a smaller down payment for a lease compared to a car loan down payment.
You’ll also benefit from some of the costs for maintaining the car being covered for you as part of the lease. This means you may not have to worry about servicing or repairs as the lessor may cover it themselves. You also won’t have to worry about selling it once you’re done with it, so that’s a weight off your shoulders.
You may also have to switch cars every few years, which can be exciting for many who enjoy the feel of a new car and want to experience newer, upgraded models.
The main disadvantages of a lease have to do with the restrictions. You don’t own the car with a lease, so you are often restricted on how many miles you can drive per year. This can be quite difficult to negotiate around, as some people’s daily commutes might not qualify them for some leases.
Since you don’t own the car either, you’ll have to make monthly payments. This differs from paying off a car loan because you will have to make a payment for each month you have the car, whereas you can eventually pay off the loan. There is also often a fee for terminating the lease early, not to mention other expenses such as petrol or car insurance.
The switching of cars can also be a hassle for many people who prefer to get used to how one car rides and stick with what is reliable for them.
Conclusion - is it beneficial for you?
Whether you lease a car or not depends on whether or not the advantages are meaningful to you. The financial advantages and disadvantages will be something you’ll have to work out in your budget and determine what you can afford. Leasing a car from a company such as FleetPrices.co.uk can help you find a way to obtain a set of wheels to get around much sooner and initially much cheaper, but the longer you lease, the longer you’ll have to keep paying for miles, wear and tear on a car, and at the end of a lease, you will have to make the decision to buy the car, start a new lease, or purchase a different car altogether. You also won’t benefit from any equity or ownership over the vehicle, which may not be a big deal if you don’t want to sell later on and only care about getting to point B. There is much to consider when deciding whether or not you should lease a car. Leasing makes a lot a sense for some people but is not a one size fits all experience.