Long are the days when you wanted to get a new car, you had to buy-and-drive. This method got thousands of aspiring car owners taking out car loans if they did not have ready cash. At that time, the saying, cash is king was much prevalent among the affluent, obtaining a car loan was a daunting task which barred many. However, on the same breath, there was the term car leasing.
Car hiring or leasing was another language that the luxury car buyers and corporate customers understood. Little did these wise companies of car renting services know that the service would soon infiltrate down to regular people. These days not only the elite can drive their dream cars, but college grads, families, and individuals can. The move attributed to car prices escalating by the day. According to a recent study, leasing of vehicles contributes to a substantial one-third of car sales.
The question that boggles many in the vehicle industry and aspiring car owners is what is the best between the two, renting or buying? While all seem to have their pros and cons in an equal measure, it’s imperative to better weigh their merits and demerits before settling on the most appealing option.
Why you should lease a vehicle instead of purchasing
Unless you have ready cash, the other option other than leasing would be to finance it through a loan, with monthly payments. In most cases, leasing would cost you half your monthly loan repayment fee every month. Of cause, it sounds cheaper to many, and they end up sealing a deal if they are confident with their cash flow. Below are more advantages.
A) There is no down payment
Other than the first month’s payment, registration fee, and official tag, no down payment is required as opposed to financing your new car through loans. What’s more, these days promotional lease deals are in the rampant, and they will only need you to place a down payment to acquire a deal.
B) Fewer maintenance mishaps
Many companies offer regular car maintenance services for the term the vehicle is leased. When you buy a new car, you become responsible for maintenance of the car; it’s the car’s manufacturer warranty cover. If you want to reduce maintenance cost on your newly leased vehicle, it’s imperative to keep the car for a term that is within the manufacturer’s vehicle warranty since they will be responsible for repairs that happen within the period.
C) Variety of cars more often
Leasing a car costs less thereby enabling one to drive a car that falls within their budget. Therefore, you can change vehicles after a short period. The choice allows one to drive a luxury new car at a lower cost than if they opted to finance it through a loan monthly.
D) Used car hassle is unheard of
Anyone in the auto industry understands a headache associated with selling a used car. If you lease one, all you need is to return it to the leasing company when your term elapses, and drive back home with another one, if you want to renew the lease. Another option is to purchase it if you wish.
These are only a few advantages, and if you think of the lower tax bite, small upfront cash outlay, the GAP coverage and more, you will prefer chartering other than buying.