Motorists will often look in the used car market or perhaps plan to buy new when the time comes for a new set of wheels, but is this the best approach? Buying a car is hugely expensive and it may not be the best way for a motorist to get behind the wheel of a new vehicle. Keep reading to discover a few of the problems with buying a car and why leasing might be the answer.
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First, you need to look at the prices. The cost of buying a car is high and this can make it hard for many people to buy a vehicle that ticks all of the boxes that they need. Buying outright is hugely expensive and not an option for many while finance deals can end up being expensive when you factor in interest costs. When you lease, you often end up with lower monthly payments as you are only paying for the difference between the purchase price and the residual value with no interest.
Another major financial aspect to consider is depreciation. If you were to buy a new car, it would start to lose value as soon as you leave the forecourt. New cars lose around 35% of their value after just one year and over 50% after three. The rate is slower after this, but you will still be losing money when the time comes to sell. This is not an issue with leasing as you simply hand the keys back at the end of the agreement and take out a lease on a newer car.
In addition to the above, there are then various other costs that you will need to factor in when you buy a car. These include road tax, maintenance and insurance. When you lease a car, these costs are often included which can make it cheaper and easier to manage.
Another reason that buying is not always best is that it is a big commitment. Purchasing a car is a lot of money to spend but you are also committing to that particular vehicle for the foreseeable future. With leasing, it is not a major commitment as you are hiring the car for an agreed period after which you can then return the car and arrange a lease on a newer car that is suited to your lifestyle.
As you can see, buying a car is not always the best option and there are drawbacks to be aware of. This is why motorists should always consider leasing, which often makes a lot of sense financially and also gives motorists much more freedom and flexibility with the chance to drive the latest cars every few years.