Pros and cons of leasing vs. buying a car

What is leasing, and to whom is it issued? These are frequent questions that people may have. Leasing is a form of credit without significant overpayments. When you buy a car through leasing, the owner has the right to repurchase it. That is, leasing is renting a car with the right of redemption. The car is bought by the leasing company and is its property. The customer only pays the lease payments during the specified period.

What is more profitable, leasing or buying a car

Leasing is the rental of a car or other items. You can lease not only a car but also other things. The customer pays the property's value in equal amounts over a certain period. It can be from three to five years. The period of repurchase of the car depends on the company.

Not everyone can buy the car of their dreams. A new car from the showroom will be expensive. If you are not ready to pay a large sum for the car at once, it is better to buy a machine on credit. 

When it is profitable to lease

Leasing is an affordable form of credit. You don't need to spend a large sum to buy a car. You can calculate a loan payment expense that is comfortable for your budget. Leasing is used not only by individuals but also by companies. Car fleets can be quickly updated with new cars. 

There are two forms of leasing:

  • The customer makes an agreement with the company to lease a car. Within a given period, he makes a payment for the use of the machine. At the end of the contract term, the vehicle passes into the ownership of the client.

  • The client enters into a contract to rent a vehicle without the right to repurchase it. The contract is drawn up for a specified period. The agreement states that the car remains the property of the leasing company. It means that the client rents the vehicle. 

In both cases, the car is owned by the company for the duration of the leasing agreement. The client uses it by power of attorney.

Who benefits from buying a car?

The purchase is a profitable solution for those who want to dispose of the car. Some leasing companies place restrictions on the use of the vehicle. For example, the car's mileage must not exceed the figures specified in the contract. The customer cannot sell the vehicle or lend it to third parties. 

The purchase is beneficial to those who have money. The car is immediately owned. The car owner does not have to worry about the distance traveled, etc.

Pluses and minuses of leasing 

Buying a car in leasing has pros and cons. Let's talk about the positive side. Leasing is an opportunity to buy a car on credit quickly. The buyer can choose any model. Especially if you do not have the total amount to buy the car of your dreams, leasing is a good option. You only pay for the lease of the vehicle. You sign a contract with a company to buy a car. The document spells out the terms of the lease and the monthly payment. 

There are negative sides to the purchase. These include the high monthly fee. It costs a lot of money to rent a car. The cost includes taxes and fees that the company charges. The contract may spell out restrictions. This applies to the mileage of the car. The client cannot go beyond these limits. Sometimes there are fines for breaking the contract. Another disadvantage is the duration of the payment. The agreement is concluded for at least two or four years, sometimes for five years. Very often, the overpayment cost exceeds a new car's price. The car is insured at a low rate. The client does not need to keep track of the insurance terms. The leasing company monitors this. In case of an accident, breakdown, or malfunction of the leased vehicle, the leasing company undertakes the repair. The vehicle is sent to a service center for examination. The leasing company also settles conflicts involving the car. 

If you do not want to buy a new car, you can lease the car without the right to repurchase it. At the end of the contract, the vehicle becomes the company's property. And the customer drives by power of attorney. This option is suitable for those who want to change cars often.

Leasing is a profitable credit option. The customer can quickly get the car of his dreams. Before leasing, it is better to determine a monthly payment that your salary can cover. If the contract terms and the car lease amount are suitable, you can sign the documents and get the car of your dreams.