There are some things we want, and some things we need. We’re taught to save for the things we need, but that’s not always possible. Large purchases like cars and even technology can be made on a lease basis, which might be a better option than buying outright. So how do you decide? Here’s some advice that can help you choose between leasing and buying a car.
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Your finances
Your financial situation could be the clearest indicator of whether or not you should lease or buy. If you don’t have the savings, or the credit rating to secure a car loan, then leasing could be the best solution for your current financial situation. You’ll need to make monthly repayments, and you will need some money to put down as a deposit, but it won’t be as large a commitment as it would to take on a full car loan. A visit to intelligentcarleasing.com will give you details of how much you’ll need to pay to help you work out which is better for your financial circumstances. With a lease, you’re typically tied into a two-year contract, with the option to upgrade or purchase outright at the end of your term.
The value of the car
Unlike property or antiques, it’s very unlikely that a car will increase in value. Instead, a car will quickly decrease in value. If you want to know how much a car will decrease, it actually begins when you bring the car home. Therefore, unlike investing in property – there isn’t much investment to be made by buying a car. If you can accept that and would rather have a car that you know you can switch out before it loses its value, then leasing could be a good option for you. However, if you still want the ownership of the car and be able to use it as equity in the future, then buying it outright will be in your best interests.
Your circumstances
The question of whether to lease or buy a car doesn’t just depend on finances, but your circumstances too. If you’re planning on moving soon or you have a passion for travel, then buying a car outright may not make the most sense for you. If you plan on being around for a bit longer, however, then buying a car might be in your interest.
How often you drive
You could be better off buying a car outright if you drive long distances. Lease cars come with a certain amount of mileage you can drive before being charged for additional mileage. If you intend to drive a lot, then it might be more cost-effective to buy your car instead. It is possible to opt for a higher mileage plan so that you know what you’re paying upfront. You can calculate how many miles you’ll drive in a year to help give you the best indication to help you make your decision.
If you’re a car fan
Leasing a car is great for people who tend to want something that gets them from A to B. If you’re a car fan who loves to own their own car, chances are you won’t be content with a lease car. Buying your own car gives you the freedom to customise and alter it as you see fit, becoming a hobby as well as a vehicle to get you from one place to another. If you prefer classic cars as opposed to new cars, then leasing won’t be the way for you to indulge your hobby.
Whether or not you want to deal with repairs
Car repairs are inevitable as your car gets older. The cost of maintaining your car can be a significant cost, increasing the longer you own your car. With lease cars, however, the cost of maintenance is much lower and may even be included in your agreement. As lease cars tend to be new cars, the chances of your car needing repairs are much lower. You will, however, need to ensure that you check what is required when you return your lease car, to prevent you from facing additional charges. If you want a hassle-free agreement, leasing will be the way forward to give you access to the latest vehicles at a price you can afford.
Whether you choose to lease or buy a car, you’re going to need some money to pay for deposits, finance or your monthly lease term. If you’re finding it tough to save, you might want to cut down on other personal expenses to help ease the burden. Owning/leasing a car is a big financial commitment whichever option you go for, so make sure you know what you’re getting into by working out which option is best for your needs.