The decision to lease or purchase a car will significantly affect your budget and financial life. Leasing and purchasing a car: each comes with its own sets of advantages and disadvantages. Leasing is a legal agreement in which the vehicle owner provides you a car to drive for a fixed period as rent and you have to pay a fixed amount as its rent. Leasing works on the terms of the agreement with the car owner.
On the other hand, purchasing a car means you have full control over the vehicle. You can use it as per your wish, but this option is costly as you have to pay a large amount to own a car. However, there are various options you can choose to buy a vehicle like car loan, or personal loan. Before purchasing a car, you have to ensure to consolidate debts in hand to secure enough money to handle your budget effectively.
In this blog, you will learn the top pros and cons of leasing and purchasing a dream car:
Pros of Leasing Car
Low Monthly Rent
Leasing doesn’t cost more as you have to pay rent for using the car of its owner. The payment is very minimal as you can also negotiate your rentals with the car owner. It’s an affordable deal as compared to purchasing a brand-new card or financing your vehicle. Actually, you are paying a part of the depreciation of the vehicle during the lease term.
Options to Lease Various Models
Leasing provides a perfect opportunity to use newer models very frequently. It helps you drive a new car most probably as car leasing agents have too many cars in their control, some are old, some recent or some newly launched. In this way, you can enjoy the best technology in cars with a variety of experience of driving several models.
Minimal Repair Cost
Leased Vehicles have a very minimal repair cost and most of the vehicles are under warranty when they are provided on lease. Only, you have to pay for its routine maintenance and the cost will be very less.
Great Experience in Driving a Variety of Cars
Leasing of cars provides a better opportunity to drive several types of cars of various designs, companies and with several models. You will get a perfect realistic experience in driving old, and latest cars.
Disadvantages of Leasing Car
Limitations of Mileage
One of the primary disadvantages of leasing a car is mileage limitation. Some vehicles come with mileage restrictions with a range between 1000 to 15000 miles annually. If you exceed this restriction, may impose several types of costs and penalties.
No ownership
Leasing does provide you ownership of the car and hence, you can’t use it as per your wish. You have to keep in mind that this vehicle belongs to someone else and have to drive carefully. In the end, you may feel that it was just a waste of money as you don’t have a vehicle now.
Note: You should consolidate debts and EMIs in hand before leasing a car as it will be hectic for you with with outstanding debts in hand.
Restrictions of Customizations
There are various types of restrictions imposed by vehicle owners for making customization. Without prior consulting with the car owner. If you go against their agreement, you have to pay a definite penalty as per the rules of leasing property or vehicle.
Pros of Purchasing a Car
Full Ownership
If you buy a car, then you will get complete ownership and you can easily use your vehicle as per your wish. There is no restriction in driving your car and mileage limit as you have bought a brand-new vehicle. You will get all the benefits of it.
No Mileage Limit
You don’t have any limitations in mileage and driving your car. So, you don’t need to worry about mileage penalties. So, enjoy your drive with ease on any road as per your wish.
Better Customizations Access
You can easily customize your car as per your preference. Whether you want to add a new sound system or change the paint colour, it’s up to you what you want to personalize.
Great Resale Value
After driving your car for more than 12 years, you can easily resale it at good value. Some potential buyers can give you a handsome amount for your car and with that, by managing some more budget, purchase the latest edition of your dream vehicle.
Cons of Purchasing a Car
Higher monthly Payment
Purchasing a car on financial assistance like the car will require you to pay a huge EMI. It will be heavy on your pocket as compared to leasing an old car.
Depreciation
On passing over time, your car depreciation cost will rise significantly. You can’t sell your car at the same rate you have purchased from a car showroom.
Regular Maintenance Cost
As your car becomes old, the maintenance cost will rise significantly. You have to do regular repair and maintenance of various parts of your vehicle, which will cost heavily on your pocket.
Summary
There are various types of pros and cons of leasing and purchasing a car. Leasing is a legal agreement and term in which you get the car on lease from its owner to drive, but in purchasing a car, you own your dream vehicle.