Buying and leasing of a car

November 25, 2019

The buying and leasing are two different things and choosing one is a bit of a tough task. Buying a new car leads to heavy investment initially and also comes with the huge monthly payments. Once you are done with monthly payments, you can have the ownership of the car.

Lease comes with a lesser amount of monthly payments for the specified amount of time. It works like you are leasing the car for a longer duration of time which involves all the legal procedures.

Should I lease or finance my car?

Buying a new car? Does your bank balance allow you to buy the car? Considering the option of obtaining a loan or lease the car. But you’re still confused about which option you should take?

First of all look at the benefits of both leasing and buying before making a decision.

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What are the benefits of leasing a car?

There are various benefits of leasing the new car

  • It requires lesser investment initially.
  • The lesser amount of EMIs.
  • Repairing costs are included in the warranty.
  • It also works in saving your capital amount.
  • Tax benefits – depend upon which lease structure you’ve chosen.

What are the benefits of buying a car?

  • The high amount of re-sell value.
  • New cars come with new and advanced technology.
  • No mileage limits.
  • You can customize the car according to your choice.

You have seen the benefits which give you a glimpse of the lease or buying a new car. Now, the question arises how you can do it and what procedures you can follow. We have simplified the things for you and provided you every information which can be fruitful to you in the long haul.

How to lease a car?

Don’t confuse between the two terms leasing and buying are entirely different from each other. The leasing provides you the platform to drive the new vehicle for a specified amount of time which lies between 2 to 4 years. In order to lease a car, it requires the following few steps which will help you in leasing a car.

1. Maximum Research

The more you research, the chances are you will get better options. Do remember everything comes with terms and conditions. Read them carefully before indulging in anything.

Lease comes with various limitations such as the number of miles, damage charges at the time of returning the vehicle. They can charge you an additional cost too.

Leasing also requires a positive FICO score (i.e. more than 700) in order to lease a vehicle. If you have less credit score it will create the problem.

2. Fix your Budget

Leasing the car requires setting the budget for how much amount you can spend on monthly lease payments. There are chances, you might have to pay extra charges at the time of leasing the car. So set your budget accordingly.

The company from which you are leasing the car can provide you the option of taking Gap insurance.

What is Gap insurance?

The insurance cost includes in the lease agreement or chances are you can pay it separately too. This insurance provides benefits in the long run at the time of early termination and exceeds the insurance value of the car.

3. Visit multiple dealers

You have a budget in your hand which means you can visit dealers regarding the leasing of car. There are chances you won’t find the car you are eyeing for but visiting multiple dealers can solve this problem.

It also provides you different quotations of the different dealers through which you can choose the one which suits your budget best.


4. Always negotiate

No matter what the dealer is proposing, you should have a say in the lease agreement. At the time of acquiring the lease, you can negotiate on various terms such as mileage, vehicle price and most important rate of interest.

The more you negotiate chances are you will get smoother terms which won’t create trouble in the future. The time you have confirmed the vehicle which you are leasing and then begin the paperwork. Always cross-check the document in order to avoid any future grievances.

5. Remember to care.

No matter what amount you are paying on lease, do not cross the limits as the damages of the car will be borne by you only. In order to avoid the additional fees and payments do not mess the car and we will advise you to take the insurance. The insurance will protect you from damages and also make sure to get your car serviced every now and then.

Epilogue

The above information present has given you a clear insight into the leasing and how it works. Both the options have their own set of benefits we have given you a glimpse about it which can clear your confusion and you can make a better decision.