Buying a new vehicle is one of the most exciting milestones for an individual. However, before you splurge your money, it is wise to decide whether you should buy or lease a car according to your requirements.

To decide on the best option for you, it is crucial to analyse the various dimensions involved in the car-buying or leasing process. 

• Should you buy a new or used car?

• Does your car determine your status symbol?

• How much would it cost?

• How many miles can it cover?

• What is the purpose of your purchase (business/practical)? 

To help you with your decision, we discuss some important aspects of leasing vs. buying a car. 

What Does Leasing a Car Mean?

Leasing a car involves a contract between two parties, where one party permits the other to use the car for a specified period in exchange for fixed monthly or periodic instalments. These instalments include insurance charges as well. The lock-in period ranges from a minimum of 2 years to a maximum of 5 years. 

It is a good option when you:

• Want to drive a car that you can’t afford to buy.

• Do not intend to own a car.

• Are looking for more affordable solutions.

• Love to switch brands every few years.

Leasing is frequently confused with hire-purchasing. Let us understand the key differences between leasing and hire purchasing.

Pros and Cons of Leasing a Car

Pros

Leasing a car comes with benefits, such as:

• You get the experience of having a new car.

• It is pocket-friendly since you only have to pay for the period of usage.

• You do not have to worry about being charged depreciation on a car.

• Flexibility to upgrade your model within a few years.

Cons

Leasing a car can also be challenging for various reasons, such as:

• Extra cost for extra miles covered because of restriction of annual mileage cover in leasing.

• Penalty to be paid for any wear and tear during the leasing tenure.

• Customization is not possible in a leased car.

Buying a Used Car

 Buying a new car allows you to be the legal owner and have complete possession. 

However, buying a brand new car might cost you more than hiring or leasing. If you wish to buy an affordable new car, you should consider alternatives like pre-owned vehicles and used cars. These options allow you to become a car owner at pocket-friendly prices. Car dealership places such as Auto Best Emporio let you purchase pre-owned luxury cars such as BMW, Audi, Bentley, Ferrari, and many more, at prices starting at just Rs. 10 Lakhs.

Pros

Buying a used car offers many benefits, from low cost to customization flexibility. Some important examples are:

• A used car is more affordable compared to a new car.

• The buyer becomes the legal owner of the car after the full settlement of payments.

• No restrictions on the extra miles covered.

• Freedom to keep the car or to resell it to others after full settlement of dues.

Cons

Though buying a used car is economical when compared to buying a new car, some important points need to be considered:

• Used cars require a huge amount of down payment to purchase.

• Increased responsibility for the repair and maintenance of cars.

• There is little to no warranty on used cars.

• Possibility of outdated machinery and parts in cars.

Leasing vs. Buying a car

Now, the biggest question arises ‘Is it better to lease or buy a car?’. To resolve this dilemma, let us compare the two on some important grounds.

Leasing vs. Buying a Car

The choice of leasing or buying a car depends on your individual needs. The leasing vs. buying car calculator is an online tool that helps you compare the costs of leasing or buying a vehicle side-by-side and reach a cost-effective conclusion. 

• Step 1: Enter the accurate values in the fields provided.

• Step 2: Click on the calculate option.

• Step 3: Get auto-generated results showing the costs associated with leasing and buying a car parallelly.

Determining your budget, cost-effectiveness, driving habits, and long-term plans will help you choose the most suitable option.