Cars are one of the highest selling products no matter if you are in a developed nation or in a developing nation. It is the need, comfort, style and in most of the cases the reputation signature of a family. Loads of emotions and personal sentiments go with the car (no matter first car or second) than the rationality and there we make some mistakes.
When deciding whether to lease your next car or to purchase the first question you should ask yourself is will you be wanting a different model in a couple of years or are you the type of person that drives a car till it stops working?
The advantages and disadvantages of leasing:
- It is always good to lease a car when the valuation of the car is good for over one year. A car begins to depreciate in value almost immediately.
- You may be able to drive a new model or higher end vehicle if leasing versus buying for the same monthly payment.
- Most repairs are covered by dealer with a leased vehicle. This can provide you with peace of mind.
- Be very sure of your immediate financials before you go for lease. Always beware of the least EMI amounts during a lease period and what will happen if you miss a payment.
- Full coverage insurance is needed for leased vehicles versus liability insurance. This will however also be required if you are financing a vehicle rather than paying cash for it.
- You do not own the vehicle and are basically renting one. You do not gain any equity in the car and cannot sell.
- You may be able to have a lower monthly payment on a car you are purchasing by extending the length of the payments. Once the vehicle is paid off you can keep driving it without a payment or sell it for current market value.