The pros of buying
If you have never had any experience of getting finance on cars or looking into the different options available, buying a car outright may be the only way you know how to get your hands on a car. Of course it is the most popular way to vehicle ownership and comes with many advantages.
- You own it outright – this is a clear and simple way to get a car with no complicating factors. The car is yours to use as you want
- Sell at any time – a benefit of buying is that once it is yours you can sell it at any time. If your circumstances change or you no longer need your car you can simply sell it straight away
- Make any changes you like – if you like to have a car that you are free to make changes to then it is a great idea to buy as this will provide you with complete freedom
The cons of buying
It is important to remember that buying has its disadvantages too. While buying and owning a car can be convenient, sometimes it is simply done because the buyer isn’t an aware that there is another way which could actually benefit them. If you have only ever bought a car in the past you might not realise that some of these can be avoided through leasing.
- Higher monthly payments – if you buy your new car on finance you will higher monthly repayments. So if you are worried about keeping your monthly outgoings down, buying may not be the right option for you
- Depreciation is a real problem – unfortunately cars often depreciate very quickly – the average new car has a residual value of just 40 per cent of its new price after three years. In fact, depreciation works out to be a car driver’s most significant cost apart from fuel
- Selling is all on you – if you do come to sell the car, you will have to do all the work yourself. This could mean organising viewings and test drives or selling at a lower rate than you were looking for
Car leasing is becoming increasingly popular as people start to see the value in having a new car for a short period of time. If you like to have a new car but would prefer to avoid the hassle and cost of ownership, leasing can be an ideal solution for you.
- Low monthly payments – in general lease payments are far cheaper than buying, and there will also be a much lower or non-existent down payment which can make it a very attractive proposal financially
- Always drive a new car – if you like to drive a new car, leasing may be the best option for you. When you start a lease you will have a brand new car and this will be yours for a fixed period. You can then move on to another lease and start the process again.
- Avoid expensive maintenance – typically new cars have far fewer maintenance problems than older cars, so while it cannot be guaranteed, you can expect to face much lower maintenance costs with a leased car.
The cons of leasing
Leasing isn’t for everyone and it is important that you should put in the proper research to make that that it works for you and that you are getting what you expect. This is a very different scenario to owning a car outright and it is important to understand the differences.
- It may be a challenge for those with poor credit – if you have a bad credit history it may not be possible for you to lease a car
- You are responsible for wear and tear – you can face fines or additional charges at the end of your lease if there has been significant wear and tear to the vehicle. This can make the overall contract more expensive
- Long-term it can be more expensive – if you commit yourself to leasing long-term, it can work out to be far more expensive