How to Choose Between Leasing and Financing a Car

 * Collaborative post

Every car fanatic has a part of them that fantasises about cruising around in their favourite car. Whether it’s something you freely show the world or something you keep to yourself to fantasise about, everyone has had the daydream of putting their foot down and letting the engine roar while driving alone. Whether you like exotics, muscle cars, or even good old ecologically friendly hybrids, there is a possibility to get your hands on the car of your dreams (of course, within your budget too). We’d all like to race around in an Aventador, but that’s only a pipe dream for people with a six-figure income. Continue reading to learn how you can get your hands on a car that will turn heads!

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So, do you lease a car or finance it with the intention of owning it once it’s paid off?

Leasing explained

Leasing allows you to drive around for a specific period of time agreed upon by you and the dealership in exchange for a monthly payment. This is normally for a two or four-year period. You’re essentially renting the car from the dealership, so your fun will have an expiration date. However, it is significantly less expensive than a financing option, and it also allows you to lease yet another awesome car to cruise about in, whether you choose a Volkswagen or a BMW.

Deposits

The beautiful thing about leasing a car is that you don’t always have to find a deposit to put down on the vehicle. Whereas with finance, you usually have to come up with a sizable down payment before the dealership will even sit down and talk to you about financing the car.

Maintenance

Because you don’t own the car even once you’ve signed the lease, the manufacturer’s warranty will usually cover any maintenance charges. Even if something goes wrong with the car, you won’t be saddled with huge repair bills because this covers everything from the tyres to the exhaust.

Financing risks

However with financing the situation may differ. Some garages may offer this option while you’re paying off your car. However once the car has been paid for, you have to think about servicing and repairs, and if you have chosen a particularly exotic car like a Porsche, you may struggle to get spare parts at an affordable price. If you do choose financing, think ahead to this kind of situation. This is also where it is worth understanding agreements properly, including things like pcp claims, so you know exactly what you are signing up for and what your options are later on.

Flexibility

One of the benefits of being able to choose a new car to lease once your current lease expires is that you could test out different cars on a regular basis, as well as take full use of cars with higher fuel economy, different sorts of vehicles, and even avoid depreciation on cars that you own.

As you can see, there are numerous benefits to leasing rather than financing. While financing a car has its advantages, for people who do not have the funds to purchase a car altogether, leasing is a much cheaper and more useful choice to explore for your car purchasing needs.