Are you torn between the freedom of owning your own car and the flexibility of renting one? The decision to buy or rent a car can be a tough one, with both options offering unique advantages and disadvantages. So, how do you choose which road to take?
If you are planning to purchase a car in India, you might be wondering whether leasing or buying is a better option for you. Both options have their pros and cons, and it’s essential to consider your individual requirements and financial situation before making a decision. In this article, we’ll explore the advantages and disadvantages of leasing and buying a car in India, along with examples. Leasing a car has its own
Leasing a Car
Leasing a car is like renting it for a specific period, usually two to four years. During this time, you make monthly payments to the dealership or leasing company, and when the lease period ends, you return the car.
Here are some advantages of leasing:
Lower Monthly Payments
One of the primary benefits of leasing a car is that you’ll typically have lower monthly payments than if you were buying the same car. This is because you’re only paying for the depreciation of the car during the lease period, rather than the full value of the vehicle. For example, if you want to lease a Maruti Suzuki Swift, you might pay around ₹7,000 to ₹8,000 per month.
Lower Repair and Maintenance Costs
Since you’ll be driving a newer car that’s still covered by the manufacturer’s warranty, you’ll generally have lower repair and maintenance costs. Additionally, some leasing agreements include routine maintenance services, such as oil changes and tire rotations, which can save you money.
Newer Car Models
If you’re someone who likes to have the latest and greatest car models, leasing might be a good option for you. Since you’ll be returning the car at the end of the lease period, you can upgrade to a new model without having to worry about selling or trading in your current car.
However, there are also some drawbacks to leasing a car:
Mileage Restrictions
Most leasing agreements come with mileage restrictions, which can range from 10,000 to 15,000 kilometers per year. If you exceed the mileage limit, you’ll have to pay additional fees, which can quickly add up.
No Ownership
When you lease a car, you’ll never own it outright. This means you’ll have to make payments indefinitely if you want to continue leasing, and you won’t have the option to sell or trade in the car for cash.
Buying a Car
Buying a car means you’ll own the vehicle outright. You can either pay for the car in full upfront or make monthly payments until you’ve paid it off. Here are some advantages of buying a car:
Ownership
One of the primary benefits of buying a car is that you’ll eventually own it outright. Once you’ve paid off the car, you won’t have to worry about making monthly payments anymore, and you can keep the car for as long as you like. For example, if you want to purchase a Tata Nexon, you might pay around ₹10,000 to ₹15,000 per month for a four-year loan period, after which you’ll own the car outright.
Customization
When you own a car, you have the freedom to modify it to your liking. You can add custom wheels, tint the windows, or install a new sound system without worrying about violating the terms of a lease agreement.
No Mileage Restrictions: Since you own the car, you won’t have to worry about mileage restrictions. You can drive as many kilometers as you want without having to pay any additional fees.
There are also some disadvantages to buying a car:
Higher Monthly Payments
Buying a car outright will typically result in a higher monthly payment than leasing. This is because you’re paying for the full value of the vehicle, rather than just the depreciation.
Higher Repair and Maintenance Costs
As the car gets older and the manufacturer’s warranty expires, you’ll generally have higher repair and maintenance costs. You’ll be responsible for all maintenance and repair costs, which can add up over time.
Resale Value
While owning a car outright means you can sell it whenever you want, you’ll have to deal with the hassle of finding a buyer and negotiating a fair price. Additionally, cars typically lose value over time, so if you decide to sell it several years after purchasing, you might not get as much money as you originally paid.
Automotive Purchase is not a one-size-fits-all advice. One needs to evaluate his/her own financial status quo and decide which alternative suits them best.