When it comes to acquiring a new car, there are advantages to buying and leasing vehicles that mean that depending on your circumstances, you might be better leasing a vehicle than buying one and vice versa.
Buying a vehicle
Buying a vehicle is a viable option for those who are looking for a second-hand car, but even when looking at buying a new car there some advantages, for a start you own the vehicle. Even if you finance the car, it is still yours and can be sold when you wish to, not handed back to the dealership with nothing to show for the money you have spent. If you buy a car second hand you also don’t have to worry about mileage limits either. However, it can be very expensive and if you have an accident where the vehicle is written off, you still have to pay off the cost of the vehicle if it is still on finance and have no car.
Leasing a vehicle
Leasing a vehicle is a cheaper option if you want an upmarket vehicle but can’t quite afford the high price tag. Leasing is simply where your monthly payments to the lease operator cover the cost of the vehicle’s depreciation (fall in value) plus their profit. As upmarket vehicles hold their value better than other vehicles it makes it cheaper. There are other factors that do affect the depreciation, which are important to consider. These factors include tax and fuel efficiency, when tax or the price of fuel goes up then vehicles that go through fuel quickly will depreciate in value quickly making them more costly to lease.