Deciding whether to lease a new vehicle over buying it outright is a matter of priorities. For some, the choice comes down to the practical financial option. For other drivers, it's all about the emotional attachment to the car. Before you make the decision, let's break down the key distinctions between these two courses of action.
Pubished 4 months ago
Leasing draws similarities to renting. A fee is paid to a dealership for the use of a vehicle for a period of time, usually 36 or 48 months. After the lease is completed, the driver has the choice of returning the car to the dealer or purchasing it at a predetermined price according to the lease contract. That's a lot different from buying a car. Buying it outright means the car belongs to you after the loan is paid off.
TIP: Make sure your insurance covers any repayments that may still be due if the car is in an accident before the lease runs out.
Why Should I Lease?
Leases don't have the same flexibility as buying new. You are bound by a contract that discourages any customization, in fact the finance company may require that you reverse the mods before you return the car, which is both an inconvenience and an extra expense. Also, there are limits on mileage set at the beginning of the lease and an additional fee for exceeding it.
Speaking of fees, there is an acquisition/initiation fee to be paid to the finance company for handling your case, prior to picking up your new car and a disposition fee for cleaning at the end. These fees can be assimilated into the lease repayments or taken care of on separate occasions. You also have the option to include insurance should you want to see a combined figure rather than keep track of separate avenues. If you are prone to losing track of your bills amongst hundreds of unread emails, then this could be a helpful option! Similarly, if there is a lump sum amount left at the end of the lease, then the residual amount must be paid in full.
Deciding whether to lease or to buy is a very individual decision. Your repayments and interest rates will be different depending on each person and your personal circumstances. It’s important to take stock of your finances, consider the points outlined in this article and speak to your accountant before finalizing your contract. There is also a team of financial advisors and business managers at our dealerships available to talk you through the whole process when you’re ready to get the ball rolling! You can make an appointment to talk to a Finance Manager at your preffered location here.