When you lease a car it means that you pay for part of the vehicles cost – the amount you used when driving it. At the end of the car lease you have the option of buying the vehicle at a pre-determined price or returning car to a local car dealer.
Whereas buying a vehicle is a fairly straightforward process. You borrow money from a lending institution, pay the dealership for the car, and then make monthly payments on the loan until it’s paid off. As you pay off the loan, you gain equity in the vehicle until it’s eventually all yours.
You can admire the looks of your car once you get it forever and can bring about changes to it if you wish. A new paint job or getting new tires for it, anything you like could be done. The important point to keep in mind is the resale value which could be reduced because of the changes you bring to the original condition of the car.
The advantage of leasing a car is monthly car lease payments that are usually lower than monthly car loan payments because you are paying only for the vehicle’s depreciation during the car lease term, plus rent charges (like interest), taxes, and fees.
Out of many cons of leasing a car vital one is you can’t customize your vehicle in any permanent way. So if you wish to get your car repainted then you need to only dream about it because that is not permitted on a leased car.
When deciding bear in mind the advantage of buying a car that it can be yours on complete payment of the bank loan. You can bring about any changes in it you want and drive it around without any mileage limit; which means no penalties on exceeding your mileage quota.
The biggest drawback of buying a car is that it is a depreciating asset; it loses value over time with some makes and models depreciating faster than others. So, the car we now own and don’t really want isn’t worth very much when we try to trade it in.
There is no apparent answer on whether purchasing or leasing a vehicle is the better option. Above specific factors you should consider before making a final decision between car loans and car leases. All consumers have diverse needs, wants, and economic limitations that may determine their final decision. I feel that car lease is more appropriate since new models can be exchanged within a year or two of lease payment and we don’t have to be scared to be in negative equity with car leasing.
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