With the changing trends in the automotive market, automotive manufacturers are coming up with new trends in order to promote sales of the new and already existing vehicles. From offering discounts, providing additional benefits and doing every single thing they can to promote vehicle sales, automotive manufacturers have now come up with a new trend that is slowly gaining popularity in India. In today’s featured, we will take a look at automakers’ new move of providing the cars on a lease basis. We will have a look at leasing vs buying a car and which one makes more sense practically and mathematically!
Leasing a car | The Basics
In simple words, leasing a car is somewhat similar to renting an apartment. This is a situation where you can simply skip huge down payments and get a new car by paying a nominal fee and monthly rental thereafter. This can be a good option for people who like to switch to a new car every 2-3 years and also want to skip the hassle of maintenance issues and costs while they own the car. But there are downsides to every new experience you have in the market. Let’s do an in-depth comparison between the two car ownership experiences in India!
Leasing vs Buying a car
Leasing a Car | Pros
Lower Monthly Payments:
In the case of leasing a car, you are not applying for a car loan. Therefore, you can skip the hassle of calculations and interest rates. What you are liable to pay is a simple monthly fee based on what your service provider is charging you. Also, the monthly payment given against leasing a car is often lesser than what you pay as an EMI against your loan so this proves to be an advantage in the case of leasing vs buying a car.
A new car every few years
This is the best advantage that leasing provides over buying a car. For all those people who don’t prefer keeping their cars for over 2-3 years, leasing can be the perfect option as you simply pay for it till you own it. As soon as your membership expires, you can switch to a new vehicle!
If you lease a car, it is the dealership that takes care of the maintenance and the repair work. You don’t have to take care of periodic maintenance and under many promotional offers currently being rolled out, you don’t even have to pay for it! Yes, you read that right!
- No resale worries
Another advantage that leaving a car provides you is that you don’t have to worry about the resale value or even the resale process of the car you are driving. You just need to hand it back to the dealership as soon as your lease period gets over.
Leasing a car | Cons
Its quite obvious that if you drive a particular car for a long period of time, you would like to modify it a bit or at least customise it according to your taste. Well, its not possible because you actually don’t own the car! In the case of leasing a car, you can simply put in fuel and drive the car in-stock conditions. That’s all!
Another major disadvantage that you face in the war of leasing vs buying a car is that you get a limited number of km that you can drive while the car is still with you. At the end of your membership, the dealership can charge you extra for each extra km that your car has covered above the limit that was previously decided in the terms of the lease.
We know we mentioned that the dealership handles the servicing part but just to let you know it is limited to periodic servicing only. Major repair works are usually not covered under lease terms and it is you who has to bear the cost at the end. Imagine paying for a car that you don’t even own! Fair enough? We don’t think so.
You don’t know what the future may bring. Imagine yourself paying 2-3 years for a car that you are using and suddenly after that, there is a natural disaster or you become financially unstable due to any other reason. You will lose the car’s subscription and you will be left without any vehicle because you already don’t own it! You need to plan your financial stability if you are going for a long term car lease. It’s not possible in most cases to do so.
Feeling the ownership
Buying a car is not like buying other things in India. It’s an experience! Being an owner of a car you always dreamt about is another feeling within itself. In case you lease a car, you won’t be owning it and may feel low in a society where your near and dear ones might own a car and you drive a “rented” vehicle! It’s not fair to think like that but people here usually take time to accept new things. This con is not practical at all but still exists in our society somehow.
Leasing vs buying a car | Conclusion
Well, we’ve given you the pros and cons of leasing a car. If you’ve read carefully, you would know we said that you need to pay a lower monthly rental if you lease a car than what you would need to pay as an EMI if you owned it. This man in the video below will tell you how you end up paying more overall sum for the same period of time in the practice of leasing vs buying a car. Watch the video carefully and pay attention to the math.
Now that you have also seen the video and realised that leasing will cost you more anyhow and you still can’t modify, customise, own the car completely and even need to pay for major repair works, we don’t think there is any sense to go for a car lease unless and until you are there in a city for a particular span of time and are planning to shift afterwards skipping the hassle of reselling everything. In the end, we would like to mention only one thing. Pay extra only if it’s worth it! The choice is yours!0