Owning the car of your dreams might seem like something that’s completely out of reach. But with the help of car financing, it could become a reality. There are plenty of options out there nowadays even those looking for car finance with defaults, so you could be able to find something to suit you. An alternative way to drive around in a new car is to lease it. So, keep reading and discover the benefits and drawbacks of leasing a car.
Table of Contents
Benefits
Lower Repayments
One of the potential benefits of leasing a car is that your monthly repayments could be a bit lower than other methods of finance like a loan. This is because the lease agreements are only set out for the agreed term and no longer than that, so you don’t have to worry about increasing costs or depreciating value. Leasing is essentially renting the car, so your monthly repayments should be lower than if you were to pay for it using a loan. Everybody wants to save money, so going down this route to get a car could be a great option.
No Repair Bills
Typically, when you lease a car, the repairs and maintenance is covered by the warranty and the amount you pay back each month. This means that if something goes wrong with the car, you won’t have to fork out for the bill. Not having to pay for repairs is one of the biggest benefits to leasing a car, as it can really help you save money and allow you to get your car repaired quicker. It’s like when you own a house, you have to pay for anything wrong with it. But leasing is like renting for tenants. The lender is the landlord, and they need to manage the maintenance of the car.
New Car Regularly
When people lease a car, it’s often only for a couple of years at a time. Then when your lease is up, you can simply give back the car and get a new one. This can allow you to get a brand new car on a regular basis, and upgrade to something better when the time’s right for you. When you buy a car, you are the owner so if it is no longer suitable you would be responsible for selling and buying a new one.. But when you lease a car instead, you can easily get a sparkly new one when your term is up.
Drawbacks
No Ownership
One of the things that some people don’t like about leasing is that you’ll never own the car. With the payments being lower each month, you could benefit from saving money, but you still won’t own the car at the end of your term despite all the cash you’ve put into it. Some car finance options mean that you will own the car at the end of the term and others give you the option of buying the car at the end with a balloon payment but leasing often doesn’t. So, if you want to own your own car, then leasing might not be for you.
Damage Costs
Although things like maintenance can be covered by the company you’ve leased your car from, damage caused by you may not be covered. For instance, when you get to the end of your lease and have to hand it back, any extra damage to the car could lead you to be charged. So, while it may be less money each month, you may have to pay more if you go over any milage restrictions or cause any damage that causes the company to charge you for it at the end of your term.
Ts & Cs
Some terms and conditions of a lease can be quite strict. For instance, you may be charged if you want to end the contract early and you’ll most likely be subject to a hard credit check before your application is approved. Some leases will have a mileage cap too, so your monthly repayments will be determined based on how many miles you drive. The milage limit can also cause you to be charged if you go over it, so you’ll need to keep an eye on it if this a part of your agreement.
Car leasing can be a great way to get the car you’ve always wanted, but there are some benefits and drawbacks that you need to consider. If you don’t care about owning your own car and want to keep your monthly outgoings as low as possible, then leasing could be ideal. However, if you want to be the sole owner of your car and be able to sell it on when you want, you might want to consider other options. Now that you know the benefits and drawbacks of leasing a car, you should be able to make a good decision as to whether or not it’s right for you. So, make sure you take this information on board if you’re thinking about getting a new car.