The Car Owner’s Guide: Buying vs Leasing

Having a car is great; it affords you a level of independence that you might not have experienced before. Regardless of whether you are looking to get your first car or you simply need to trade up for whatever reason, purchasing a car is a big deal.

One of the biggest questions when it comes to car shopping is whether you should buy or lease. Let’s take a look.

Buying

There are a couple of options when it comes to purchasing a vehicle outright. You can either buy new from a dealership or choose to buy second-hand from a dealer or private seller. In doing so, it gives you outright ownership and dominion over the vehicle. This is, of course, the pricier option. However, buying a vehicle outright is often cheaper in the long run because you do not have to deal with interest added, as you would when you make repayments.

You might also be able to get a deal if you choose a second-hand model. The car is also yours to do with what you like. That being said, you do need to have the cash up-front for the sale, which is often not possible for most people on an average income. The car is also likely to depreciate in value which means that when you come to sell it, you are likely to need to take a loss.

Leasing

Leasing a car is effectively renting. You are expected to pay monthly to use the car for however long the term of the contract is. Within the contract, the mileage will also be specified, among other terms. At the end of the leasing period, the car is then returned to the provider. You never own the vehicle. However, the specifics might vary depending on the car, the provider and even the fuel type. This is why doing your research is paramount before you sign any contracts. Finding resources can help.

Try being specific in your research, looking up things like ‘how does leasing an electric car work?’ Luckily, LV ElectriX has some great advice, so you should start looking there. Leasing has a number of benefits.

Firstly, you can drive a newer car for far cheaper than it would cost to purchase. Depending on the contract and the provider, you might also find that they have included other things in the monthly repayment, like maintenance, servicing costs, road tax and even insurance. Having all of these payments consolidated can be advantageous.

However, you are, of course, unable to modify the car in any way without having secured permission from the leasing company. Exceeding the mileage stated on your contract can also be costly. Finally, the payments will also impact your credit score, so you need to make sure that you keep on top of them.

The Final Verdict

So, should you choose to lease or buy your next vehicle?

In truth, there are pros and cons to both options. It should all come down to your personal preferences and your finances too. If you can afford to buy, this often makes more sense because you own the vehicle in the end, and you can do what you like with it. However, leasing is also a solid choice for those wanting to use a car without being tied down by vehicle ownership.