lease a vehicle

Vehicle Leasing vs. Buying: Which is Better Decision?

By: Sunder Singh
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The answer to this question depends on your goals, budget and personal preferences as well. Both the options have their benefits, but it all depends on what matters to you the most. Now let’s look at the main advantages of leasing a car:

 

  • Lower Monthly Payments- There is no need for any down payment, and you will not have to pay any tax either. But when you return the vehicle, you may have to pay for extra mileage which exceeds the agreed upon limit.
  • Pay for Depreciation-  When you lease a vehicle, you rent it for a fixed term. The lease amount that you pay covers the amount of depreciation which is expected during the lease term. It never happens that you end up paying more than what is expected.
  • Repair Expenses-  If you opt for VAS (value added services), the maintainace and servicing of the car is handled by the leasing company.
  • New Vehicles-  With leasing, you have the advantage of driving a new vehicle in every few years. Thus you will be driving vehicle with the latest technology, comfort, safety features, and better fuel economy.
  • No Worries about Selling the Leased Vehicle-  Once the lease term expires, you can return the vehicle or lease for a different vehicle. But you will not have to bother about selling the leased vehicle yourself. You may also have the option to buy a vehicle at the end of the lease term for a pre-set price.
  • No Need for Loan Approval-  You don’t have to wait for loan approval. Simply lease a vehicle and enjoy using it as long as you make the payment.

 

What If You Choose To Buy a Car?

  • You’ll have to bear the cost of the car either on own or through a loan.
  • You have the flexibility to sell the car when you want.
  • Unlike leasing, where there is an agreed mileage limit, ownership doesn’t come with any such option.
  • You can change the appearance of the vehicle when you want, but this freedom may not be there with leased vehicles.

 

Finally, Which Is the Better Decision?

  • Leasing if you want to avoid substantial upfront costs and want vehicle only for a certain period.
  • Buying if you can afford all the costs that come along and want to own the vehicle for long.

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