Leasing a car is a good alternative to purchasing one but it may not be for everyone
There are many ways through which to finance your new set of wheels but one which is growing in popularity is that of leasing. Here are some basic things you need to know when considering to lease a car.
PROS:
- Leasing offers a shorter (generally 36 months) repayment period than the usual 60 – 72 month purchase period
- Leasing costs include servicing and ‘normal’ wear and tear to the vehicle
- Leasing allows you to drive a new / different car every few years without incurring financial penalties
- You’d be driving a car which is covered by the manufacturer’s warranty
- Monthly instalments on leased vehicle tend to be lower than purchase price instalments
- At end of lease period you won’t have the hassle of selling it because it’s not yours to sell
CONS:
- You don’t own the car – essentially you are paying for something you will never own
- You are limited to a set number of kilometres annually and risk incurring stiff financial penalties for any distance over the agreed distance
- You are likely to be charged extra for ‘above normal’ wear and tear to the vehicle while it is in your possession
As with any contractual purchase, it is important to read and understand the terms and conditions of the agreement before signing on the dotted line; and as with any contract you may be held liable should you not fulfil the terms agreed upon.
Leasing a car is a good alternative to purchasing one but it may not be for everyone nor suite your particular lifestyle and travel needs. Before making the commitment to lease a vehicle, do as much research as possible and weigh the option of leasing against purchasing. Remember that the running costs of a vehicle include weekly fuel costs, insurance, servicing, tyre maintenance, e-tolls and keeping it clean.
