Are you thinking of buying a car soon? If so, one question that you might still be thinking about is how you are going to pay for it. Cash is always the best way to buy a car, but what if the car you want to buy is worth around $15,000? Few people have that amount of cash lying around!
In those cases, the obvious answer is to borrow the money from somewhere. Car finance is the most-common way of funding a car while some people take out bank loans instead to pay for it. Do a quick Google search, and you will find some people telling you that leasing is a bad idea.
The thing is, car leasing isn’t for everyone. So that doesn’t mean it’s a bad idea for all car buyers! In fact, even if you have the cash spare, leasing a car represents better value for money than buying it with cold, hard cash! In today’s blog post, I will discuss with you some of the reasons why.
New car deals are more attractive with leasing
There is a common misconception that leased new cars offer no advantages over buying them with cash. Let me explain why this is a misconception:
- They need to sell cars fast. Car dealers are always keen to sell as many cars as possible. They usually have a quota of cars they need to sell from the manufacturer. In most cases, they have to buy the cars themselves before they can sell them onto customers;
- They offer discounts. When dealers want to sell more lease agreements, they will usually offer big discounts off the buying price of cars. If you pay by cash, you won’t be able to take advantage of these deals;
- Quicker to arrange. A quick application process means that leased cars can go home with their new owners sooner. Borrowing the money elsewhere means that you have to wait longer to get behind the wheel of your new car.
Leasing is cheaper than buying
Some people will tell you that buying a car is cheaper than leasing it. Others, like me, will tell you the reverse is true. But who should you believe and why? Let me answer that question by examining the reasons why leasing is cheaper than buying.
When you lease a car, you do so for a short period like three years or so. After that period is over, you can choose to buy a car or hand it back and lease another brand new car.
People that buy cars keep hold of their vehicles for longer. That means the total cost of “ownership” is higher. After three years, you have to start paying for expensive maintenance repairs. And as an engine ages, it won’t be as efficient as it once was.
For people that are cautious about their spending, leasing represents a great way to save money on motoring costs. Old-school car drivers are often convinced that buying a car and keeping hold of it for years is cheaper.
The average lifespan of a functioning car is around ten years. If you spend a lot of time on the road, you need a car that is reliable and dependable. Leasing a car means that you will always be behind the wheel of a “new” car. You won’t have to worry about car breakdowns.
You can change your car more often
Have you heard the story of the guy with that three million-mile Volvo? He’s not someone that likes to change their car often. But most people prefer a change of car every so often.
When you first get behind the wheel of a car, you are in that “honeymoon period” that all new car drivers are in. But after a while, driving your car isn’t much fun anymore. Keeping a car for around three years is about the right amount of time before you decide that you need a change.
Anyone that has had to sell their car in the past will tell you how much hassle it can be advertising your car and negotiating on price.
When you lease a car, and you want to get a new one, you only have to wait until your lease agreement is over. At that point, you can just hand over the keys to your car dealer and pick up your new leased car. It’s as simple as that!
Leasing is an easy way to fund your new car
With cash, you have to save the money up before you can buy the car you want. Bank loans are harder to get these days thanks to the global economic crisis of the last decade. But did you know that leasing is the easiest way to pay for your next car?
The thing about car leases is that the money lent gets secured against your car. That means if you don’t pay your agreed finance payments, the repo man will come knocking on your door for the car!
So it doesn’t matter if your credit record is less-than-perfect. Finance companies will still agree to give you a car lease, as long as you can prove you can afford the payments.
Lease deals offer lower interest rates
In the majority of cases, lease deals get made even sweeter by the fact that interest rates charged on them are so low! Listers VW, for instance, offer great car lease deals on their Volkswagen vehicles.
It’s a story that gets repeated everywhere. Carmakers are keen to build and sell as many new cars through their dealer networks as they can. And one way they can tempt folks into driving away in a new car is to offer attractive leases!
It used to be a case where you could only get such deals if you paid a large deposit upfront. But nowadays, some leases don’t even need any money upfront!
I hope today’s blog post has been useful to you. If you’ve spotted any good lease deals, do let us know!
