Lease cars were traditionally the domain of companies that provided a car to an employee as part of their employment package, either because a car is necessary to perform the job or, more rarely in the U.S. than many European countries, as an employee benefit.
However, lease companies realized many years ago that there was also a market for leasing cars to individuals and this part of the car market has increased its share. So basically what’s the difference between leasing and buying your car and are there any benefits?
When you choose to buy a car you probably are thinking of keeping it several years, after all a new car suffers a lot of depreciation in the first year or so, and then stabilizes. It’s also likely that if you are thinking of buying a new car you will need to finance it; a new car is often the second most expensive item you purchase after your own home.
If you keep your car for the duration of the finance period, then once you have made your final payment the car is finance-free and is yours to keep or sell. However, if you multiply the amount of the monthly repayments by the payment term and add in the initial down payment you made you will be surprised at exactly how much the cost you in total.
Try selling your car and you will undoubtedly be unhappy with the value you are offered. If you then subtract the amount you could get for your vehicle from the total you have paid, and then divide that amount by the number of months you have had the car; you get to find out the monthly cost of keeping the car.
In addition to that there has been the cost of keeping it running; you will have had to get your car serviced fairly regularly and there may have been repairs that had to be done, so the total cost of buying your own car can be very expensive.
However, lease companies realized many years ago that there was also a market for leasing cars to individuals and this part of the car market has increased its share. So basically what’s the difference between leasing and buying your car and are there any benefits?
When you choose to buy a car you probably are thinking of keeping it several years, after all a new car suffers a lot of depreciation in the first year or so, and then stabilizes. It’s also likely that if you are thinking of buying a new car you will need to finance it; a new car is often the second most expensive item you purchase after your own home.
If you keep your car for the duration of the finance period, then once you have made your final payment the car is finance-free and is yours to keep or sell. However, if you multiply the amount of the monthly repayments by the payment term and add in the initial down payment you made you will be surprised at exactly how much the cost you in total.
Try selling your car and you will undoubtedly be unhappy with the value you are offered. If you then subtract the amount you could get for your vehicle from the total you have paid, and then divide that amount by the number of months you have had the car; you get to find out the monthly cost of keeping the car.
In addition to that there has been the cost of keeping it running; you will have had to get your car serviced fairly regularly and there may have been repairs that had to be done, so the total cost of buying your own car can be very expensive.
