Why lease a car? Leasing vs buying
More people are turning to car leasing as an alternative way of obtaining a brand new vehicle. But is leasing a car the best option for you?
There are a lot of decisions to make when it comes to choosing a new car. Should you buy a new or used car? Should you buy a vehicle on finance or save up the cash? What about leasing a car? How cost-effective is it and what are the benefits of leasing a vehicle rather than buying one outright?
No need to worry about depreciation
Depreciation in the value of your car is one of the main things to consider when you compare buying with leasing. Although you will not own the car at the end of the lease, your car’s resale value can determine which option is more cost-effective. Some models retain value better than others. If your car loses more value over the lease period than the total cost of lease rentals, leasing the car would be cheaper. Then you can simply hand the car back and let the lender worry about selling the car on.
“Leasing a car is an affordable way to drive a brand new model that may otherwise be out of your price range.”
Here's an example:
Let’s say the model you are interested in is worth £20,000 brand new. After owning the car for three years, the resale value of your vehicle is £13,000. This means it has cost you £7,000 to drive that vehicle for three years. Not to mention the interest you would accrue if you choose to finance the car with an auto loan.
On the other hand, if the initial rental and monthly lease rentals across three years total £6,000, leasing a car would be the more cost-effective option, effectively saving you £1,000.
Before you decide whether to lease or buy, do your sums and calculate which option is best for you. Although it largely depends on the model you select, leasing can often offer a hassle-free process and better value for money.
Why buy a used car when you can enjoy a new one?
If you have bad credit, you may feel buying a car with cash is the easier option, especially if you have already been turned down for a car lease. While an older, used car may be cheap to buy initially, you should consider its reliability and the cost of maintenance down the line. Older cars can be unpredictable, often breaking down at the most inconvenient times.
New cars, however, are generally more reliable and less likely to break down, avoiding costly repairs that come with buying a used car. Brand new lease cars usually enjoy a warranty, which means any major mechanical problems will be covered, not to mention that new cars don’t need an MOT for the first three years of their life. Why buy an old, unreliable car when you can lease a brand new vehicle? For hassle-free motoring, lease a car.
“Leasing a brand new car gives you peace of mind, knowing your vehicle is reliable, with up-to-date safety features and technology.”
Drive the latest models every few years
While it’s nice to drive a brand new car, the initial outlay of purchasing a vehicle can be extremely high. Leasing a car is a much more affordable way of enjoying the latest models that may otherwise be out of your price range. Brand new cars boast up-to-date technology and innovation, improved performance, better fuel economy, and advanced safety features. Although you will have to pay an initial rental for a lease car, the cost of this is significantly lower than the purchase price of a brand new vehicle.
Better yet, at the end of your lease, you simply hand the car back and choose your next lease car from the latest range of up-to-date models: an excellent way to replace your vehicle every two to four years.
Even if you have recently been turned down for a car lease, Eureka may be able to help you get on the road in a brand new car.