Pros and cons of leasing a car in Australia

• Car Finance,
• Jul 30, 2019

 

 

How to define if leasing a car is right for you or not? Leasing or financing car means you are borrowing your money from a financial body on terms and conditions of monthly basis repayments. These payments can be scheduled from a few months to 5 years span or more. All these payments are interest-based as per conventional loan policy, while the remaining balance is paid until equity is reached. At the end of loan or lease payment duration, final payment is made against the car and you become the new owner of your leased car. During the lease, you can’t perform any alteration or modification in the financed car but after getting its complete ownership, you are allowed to make modifications in it as per your desire. However, the resale value of a purchased leased car is less than the market value.

 

Recently, the trend of leasing a car is getting consideration as compared to buying your own car. But have you thought about the pros and cons of leasing a new vehicle?

 

Let us explain the pros and cons of leasing vs buying a car.

 

Pros of Car Leasing

If we analyze the decision of leasing a new car vs buying the car, leasing appeals more! It is the same thought coming to your mind either you will pay in bulk which you may not have for next 2 to 3 months, or you own a car of the latest model and pay for it like a pinch of salt. If you feel like hiring a car, even that would be expensive for you as compared to leased one. So, it is easy to borrow and repay against a car that gives you the following advantages:

 

1.  1- Put your hands on your new steering without any worries of troubling maintenance and repairment. You can always enjoy your daily rides problem-free for your leased years.
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3.  2- Your feet will always touch the accelerator of latest model vehicles on road, lifting your drives smoothly in the air while the manufacturer’s guaranteed warranty will cover the necessary oil changing and scheduled maintenance for free.
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5.  3- You drive your favorite brand model vehicle, no matter how much high priced due to better and latest equipped accessories, that otherwise may not be affordable by your own pocket.
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7.  4- If it is the time to move on to another latest model vehicle, you are not worried about trade-in value fluxes as you are not responsible to sell the previously leased vehicle.
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9.  5- You certainly enjoy advantages in relaxed taxation given to the business owners, that are already enclosed in leased terms and conditions. 
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11.  6- If you are bored of the leased car, or give up your mind to continue for paying the monthly charges, just simply drop off the vehicle to its financial dealer, any time.
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Cons of Car leasing

1.  1- When you are finished leasing the car, you may feel like lending a loan equivalent to the cost of the vehicle which is no more your entertaining property. Moreover, the asset value has also rapidly decreased and now, you may have owned the leased car with all repayments submitted against its leasing.
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3.  2- If you finance vehicle one after another, you are always up for monthly repayments from your income. While owning a used car, after its leased phase costs you less. You may keep the vehicle without any mileage limitation until its wheels are fallen off.
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5.  3- Throughout the lease scheme, you have to take care of its mileage limitation and you may suffer it for longer routes. Either you avoid vocation journeys on your own wheels or you may pay extra penalty charges against your excess miles. Car financing in Australia charges almost 10 to 50 cents for each extra mile used. While on the other hand, saving miles from the provided limit never rewards you back. Neither you get paid for it, nor compensated in next round of annual mileage limit.
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7.  4- Another downside of car financing is that poor maintenance costs you more than your expectations. It often happens that your kids go wild with the drive and either you know or not, the wear and tear sub-charges are applied. So be always prepared for maintenance charges every fourth month.
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9.  5- How to get out of a car lease? Can I buy out my car lease early? Many car financiers claim for leased terms and conditions giving an accessible choice of withdrawing at any moment.
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11. However, in such cases, you may have to pay thousands of dollars before getting out of lease expiration date under the claim of early termination charges, penalties and hidden fees – all due at once!
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13. Considering these charges is equivalent to paying for the entire leased duration. How to get out of a car lease without penalty? Honest chances for your answer are very low, as financier offer you something with some interest factors at their sides also.
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15.  6- Is there any smart leasing vehicle maintenance program? No, there is no such scheme in real. You are required to submit the leased car back in its original condition i.e, the same condition in which you were provided the car having no dents, scratches, wear tear, flat wheels, etc. However, there are some professional exceptions such as window tenting.
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It is always advisable for the buyers to compare the leased/financed car vs purchased car through various parameters such as reliable, comfortable seats and accessories, market value and economic fuel consumption, etc. by using an online Car lease calculator given here:  Lease vs Buy car calculator Australia If the calculations are good for leased car, you must go for it.

 

Otherwise, your decision should be to consider a less expensive car for purchase or certified pre-owned one from a trusted financing body. It is also wise to increase the lease duration with fewer interest rates – giving long-term vehicle ownership. After all, it is the cheapest and best way to own the latest model vehicle without any distortion.

 

Is there a car lease with an option to buy? Yes, you can buy the leased car after the final repayments made at the time of ending leased terms. Still looking for information on leasing a car and how it works? Learn more about secured car financing.