Advantages and Disadvantages of Car Leasing Over Buying

A most important decisions many individuals and businesses make is whether to go for car hire or whether to buy a car. Both the lease and buying have their advantages and disadvantages. Therefore, depending on your particular situation, the following factors will help make your decision.

Advantages of leasing of vehicles on the purchase

The following are the advantages of leasing of vehicles on the purchase.

Pay only for the repayment period

Where the employment contract, just pay the actual depreciation of the vehicle compared to the total depreciation as in the case of purchase. For example, if a market value of cars is $ 50,000 and will have a value of $ 30,000 in two years, the monthly payment if you decide to rent the car for two years will be the difference in value is $ 20,000. This means that you have to pay much less if you lease, compared to buying the car.

You have the option to buy

Another major advantage of leasing over buying a car is that after the period of leasing of vehicles, you can elect to purchase the car or find another rental car. This means that based on the available options below, may postpone their purchase decision until a later date. When you decide to buy the car, you can negotiate the purchase rate as the good provider, gives priority to the person leasing the car.

Damage and repairs are partially or completely covered

In most lease contracts, the costs of repair and maintenance of motor vehicles by the company was leasing. This means you can save a lot in terms of maintenance cost. Some auto leases will be available to share the costs of repairs and maintenance. The dealer, however, insist that you take a comprehensive insurance for the car and this may be an additional cost.

Credit Report

It's easy to get financing for leasing of vehicles and the risks to the company involved are low. Therefore, if your credit is bad and it is difficult to obtain financing to buy your car, you can consider leasing of cars as a viable option.

Disadvantages of car leasing over purchase

There are several disadvantages of renting a car compared to purchasing the car.

Strong contract cancellation charges

If for any reason you choose or are forced to cancel the lease contract before the contract period is due, you will pay much in terms of penalty charges for late fees. The company seeks protection from the risk of loss and therefore, penalty charges of breaking the lease before its term is more punitive. You may have to break the May term reasons. You may have to travel or may not work. You can also lose your license for a traffic violation and therefore did not use the car.

Heavy loads of extra mileage

The leasing contract sets the maximum mileage vehicles that can be covered under the contract. Then, places very high charges for every mile over the limit exceeded the contract. This charge limit its use in the car because they are not aware of going beyond the agreed mileage.

Insurance is usually higher in rented cars

Car rental insurance in the contract is usually more expensive than homeowners insurance from the insurer knows that you have no equity in the car and therefore can not keep the car with the necessary care. This insurance premiums are high additional cost to the leasing of vehicles.

Your payments do not go to the Fair

Unlike the purchase of a car, car lease payments do not go towards your equity car. As soon as the contract has ended, the car back to the dealer or lessor. You can not therefore use the car as collateral for a loan and your payments do not help in acquiring the car.