Used car leasing or new ride loaning could be the cheaper way to drive your dream car every day! If more affordable monthly repayments and fewer maintenance costs for the car you drive daily sound good, keep reading!
What is car leasing?
Car leasing is basically renting a car as opposed to buying. You pay monthly instalments for the usage of your desired car for a certain period without the intention to own it at the end. The lease agreement gives you the right to use the vehicle as your own, just like renting a house. If you opt to lease as opposed to buying, you could be able to drive the latest model of your dream car every 2 to 4 years.
After six years (72 months), which is the typical period for a vehicle financing contract, your vehicle is not worth the same as it was when you bought it. This means you might have to sell or trade it at a price that isn’t ideal. Leasing a car eliminates the hassle of worrying about what to do with your old car. You can simply take it back and get a new model if you want to.
The flip side of the coin is that lease agreements have strict restrictions, rules, and guidelines that need to be adhered to and penalties for breaching them.
Advantages of leasing a vehicle:
- Lower monthly instalments
- Drive a new vehicle more often
- No need to sell a vehicle
- Shorter contract period
- more affordable instalments
- No residual value (balloon) risk
- Insurance and maintenance could be included in the deal.
Disadvantages of leasing a vehicle:
- You do not own the vehicle
- There are restrictions on the number of kilometres you are allowed to travel
- Prescribed car service providers
- Penalties are also levied on the early termination of the contract.
You can do more reading on the subject of buying versus leasing a car here.
