Buying a car is no longer the simple task it once was! Back in the old days, you’d visit your local dealer, pay your money, and drive away. Nowadays, there are so many options. It can be very confusing, especially for the first-time buyer. Picking your dream car is the easy bit. You’ll choose the make, model, and everything down to the colour and engine spec. The tricky part is figuring out how to pay for it.
You’ll often see two prices alongside a new car on the forecourt. One is a relatively high monthly repayment; the other is much lower. What’s the difference? Well, the low price is the cost of leasing the car. It’s a viable alternative to buying, and could be worth considering. More and more people are turning to leasing when it comes to their new motors. Today we’re looking at whether that option is better for your finances.
First of all, let’s get a quick understanding of the leasing process. For the uninitiated, leasing a vehicle is a lot like a long-term rental. You’ll pay a small deposit, followed by monthly payments for three to five years. You’ll drive the car away, and when the agreed period is up, you’ll just hand the car back. The monthly payments are usually cheaper than the loan repayments involved with buying a car outright. So, your family might save a little money each month at the outset. You also get to trade the car in for a shiny new model every three years.
So far, so good, but what are the negatives? Well, the big downside is the restrictions. Remember, it’s not your car, so you’ll have to stick to certain guidelines. You’ll be given a set mileage per year. Exceeding that number will incur significant fines and costs. The same goes for any damage or wear and tear. The initial price might seem palatable, but just be careful about the costs at the end of the term.
The other option, of course, is the more traditional route. We’ve already established that buying the car upfront will set you back a bit more than leasing. However, the big advantage here is that you make your money back later. Essentially, if you plan to own the car for more than three years, you’re better off buying. If your plan is long-term, don’t be swayed by cheap leasing deals. Instead, look at Hunters finance deals or speak to your bank about a loan. There are plenty of ways to help you afford the car you love. You’ll also retain value when you buy a car. Five years down the line, you can sell it on and retain some equity.
The big advantage of buying is that the car is yours. You own it and reap the rewards of that. You needn’t stick to a certain mileage, and you’re not beholden to a leasing company.
The experts say that if you plan to use the car for more than three years, you’re better off buying. However, each car is different, so do the sums on your chosen vehicle and see which works out better for you. Good luck with your new motor!