The decision to lease or buy a car can be a difficult one. There are many factors to consider including your financial situation, your driving habits, and your long-term goals. Leasing a car can be an attractive option for many people as it allows you to drive a new car with lower monthly payments than traditional Car Loans Australia but there are also some downsides to leasing that you should consider before making a decision.
Pros of Leasing a Car
Lower Monthly Payments
One of the biggest advantages of leasing a car is that your monthly payments will be lower than if you were to buy the car outright because you are only paying for the use of the car for a set period of time rather than paying for the full cost of the vehicle.
Maintenance and Repair Costs are Covered
Another benefit of leasing a car is that maintenance and repair costs are often covered by the manufacturer’s warranty meaning that you don’t have to worry about unexpected repair bills as long as you follow the terms of the lease agreement.
Access to Newer Cars
Leasing a car allows you to drive a new car every few years hence you always have access to the latest technology and safety features which can be a big advantage for those who value the latest and greatest.
No Resale Value Worries
When you lease a car, you don’t have to worry about its resale value. You simply return the car at the end of the lease term and walk away. This can be a big advantage if you’re someone who likes to have a new car every few years.
Cons of Leasing a Car
One of the biggest downsides of leasing a car is that you are often subject to mileage restrictions so if you go over your allotted miles you will be charged extra fees which can be a big problem if you have a long commute or like to take road trips.
When you lease a car, you are essentially renting it for a set period of time, this means that you are not building any equity in the vehicle. When you buy a car, you can sell it later and recoup some of your investment, with a lease, you simply hand the car back at the end of the term.
Fees and Penalties
Leasing a car often comes with a number of fees and penalties. These can include everything from a security deposit to fees for excess wear and tear on the vehicle. You will also be charged penalties if you terminate the lease early.