When it comes to owning a vehicle for themselves and their family members, most people need to decide whether to purchase a new car outright or to lease one. For this, they need to consider what their priorities are. Individuals who have experience in buying an automobile from a car showroom are aware that value of the vehicles depreciates over a period. In fact, these owners state that the resalable value of such a car in the market after some time is equal to half its original cost. This is the reason why they do not consider buying a vehicle to be a viable option.
Consult an expert
Omari Betts, a sales and leasing consultant at ChevyChaseAcura in Maryland, United States, explains that in case of car leasing the people renting the vehicle are not the owners. As per the lease agreement with the corporate enterprise, these individuals are able to use the automobile as long as they pay the monthly installments to the organization. At the end of the tenure of the contract, they have to return the car to the business enterprise. However, the clients of these businesses can avail certain options like purchasing the vehicle at the end of the lease period or extending its term depending upon the agreement.
Benefits of a leasing a car
This leasing consultant says most people opt to lease a car rather than buy one because the initial down payments and monthly installments they pay to the leasing company are cheaper. In addition to this, they do not need to worry about the reduction in the value of vehicle over time because of depreciation. The officials of corporate enterprise conducting its business operations by leasing vehicles to the public notices an increase in the organization’s cash flow. Moreover, they can avail of various tax benefits and value added tax (VAT) relief.
Lease a vehicle or purchase one
He goes on to say people should consider the answers to following questions before deciding whether to lease or buy a vehicle:
- How much do they need to spend every month for operating the vehicle they intend to own on the roads?
- Can they afford to pay for the maintenance costs, repairs and road tax of owning a car?
- Do they want to worry about how fast the vehicle will depreciate in the coming years if they buy one?
- Are they looking for a low down payment to own a new car?
- Have they an idea of the number of miles they need to travel with the vehicle every year?
- Will they exchange or dispose the vehicle they intend to own after a certain period?
- Are they happy with a Wear & Tear policy of a car lease agreement or do they intend to look after the car they buy?
Omari Betts says when it comes to deciding whether to lease a vehicle from a company or buy one, most people opt for car leasing because of it has many financial advantages.