First, I would like to say that I am not an expert, because I have only had three cars in my life, and bought my first car when I was 29. Before that, I just made do with public transportation and rentals. For me, having a car in a big city was too much money spent on insurance, parking, maintenance.. to justify the buy.
But now that I have moved to more remote locations, having a car is a must. Before making a decision to buy my car, I crunched the numbers.
Companies like All Car Leasing make it super easy these days to lease a vehicle. You just pick a make and model, and you are presented with several options. For the type of car I wanted, such as a Toyota Rav4 or a Hyundai Santa Fe, I would be looking at monthly payments of around £350.
The business price is lower than the personal price, because it doesn’t include the VAT. The price goes up a bit if you want to lease the car for 24 or 36 months, and it is at its lowest if you lease for 48 months.
There is also a mileage limit, but the price only goes up £30 a month or so to increase your mileage from 10,000 to 20,000 miles per year.
The obvious advantage of leasing is the hassle-free process. You just come in, and pay a monthly rent like you would for a flat or an office. Everything is included, even tax, and you get a brand new vehicle ready to go. If you rent for three years, you don’t even have to worry about MOTing your vehicle.
You know exactly what your payment will be every month, and can include maintenance as well.
Once you are done with your lease, you can take the car back and don’t need to put it on the market to sell.
My first car, I lost a lot of money on because I moved and had to sell it quickly. With leasing, you give back the keys and you are done.
Another advantage I see as an investor, is that it frees up cash from my bank account. Instead of dropping £20,000+ on a car, I can keep all of it, invest it, make it grow, and pay part of the lease with the dividends from my investment.
On the other hand, you do pay a higher price for all that convenience. Monthly leasing should be more expensive over the long run. So you need to crunch the numbers, if you can afford a car cash, to find out how much you would save monthly by keeping your nest egg intact (interest from your savings account, returns on the market…), and what the true cost of leasing a vehicle would be.
You need to account for maintenance and upkeep of the vehicle as well in the case of buying.
Overall, I think leasing makes sense if your life changes quickly, for example you are young and may need a bigger vehicle once you have kids, and don’t want to go through having to sell the old one and look for a new one. It also makes sense if you are just not the kind of person who enjoys doing maintenance and repairs on your car. It is much easier to have a contract and someone ready to do it for you.
I think leasing a car is preferred in my situation as I am single and do not have a family of my own, but it really depends on someone’s needs and preferences actually.
Leasing a car is what I prefer because I am still young and wouldn’t afford a bigger car yet. I have a tendency to change from one car to another, if possible. And, I don’t want to be occupied in terms of car maintenance.
Right now I don’t need a car, but if that ever changes, I’ll take the advice in this post … thanks!
With your post, it seems to leasing car better than buying a car, right? Perhaps I should think about a new decision, Pauline!
I’ve thought about leasing a car, too. But since I don’t have good credit, I just decided on buying one. Thanks to a local credit union, I got a decent car for a good price. But if my situation were different, I might be leasing one.
Wow, such a great concept has portrayed in the blog, which is all about buying vs leasing a car. I think everyone should have to know this. Because if someone is financially sound then it is OK, means he can buy a car by paying all at a time. But many people prefer to buy a car by taking loan. So, this concept is mostly important for them to understand. Here I can say that sometimes leasing is better than buying it, as it has lower monthly payment compared to financing a car with the same loan terms. Again most lease agreements have low down payments which has a positive impact on budget and cash balance. On a final note I can say that whether someone prefers to buy or to lease or nothing, but at least he should have some basic knowledge related to this. Tank you so much for such lovely thought.
Really, it is a big topic. While discussing it, so many pro and cons will come in from both sides. Your requirement will justify the best mean. The advantages of buying a car are that you don’t have to depend on others and you can move anywhere at anytime you want. Similarly, the down side is you have to bear the cost of the fuel along with its repair or maintenance. You have to be more cautious on the vehicle and have to devote time for its regular checkup. If we take on leasing a car, you don’t have to be worried on the maintenance of the vehicle as it is the responsibility of the service provider. However, you will have to pay for it.
I also prefer leasing over buying a car. Because it is available for shorter period of time and at the end we have rights to own a car. And also if we don’t want that car further more after agreement time then we can change that car. It’s simply for those who like to be up-to-dated.
Honestly, figuring out one from owning a car and leasing it is too tough. It depends on several factors. If we consider our own situation, we can end up in a good result. Buying a car is a long term move whereas leasing it could be for a short time. If you have to move somewhere and stay there for a few days, you can prefer the second option. While you are facing ‘this’ or ‘that’ situation, you should carry out the cost benefit ratio. Both sides have merits and demerits. You have to just check them up.
For me, I think buying a car is better. I decided to own a car since I have a plan to use it for a long term. But I think my decision would have been otherwise if my situation is different. It still depends on the situation, choices, and the cost. Anyways, thank for sharing this informative post.