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24 Aug 2017

Are you pondering whether to buy or lease a car? Don’t worry we have got the answers for you.

When it comes to buying a car, several factors get involved as it’s an expensive affair. There are many who are partially ready for savings, and sometimes get pondering why they should save to meet the future financial goals. An opinion that has grabbed people’s attention in India is self-employed individuals who are engaged in the service of leasing a car. Already popular in the corporate world, leasing cars in India is slowly gaining grip from business owners and professionals as well.

Let us take a closer look and find out whether to buy or lease a car.

Getting a leased car

There are many companies that deal in leasing cars and other vehicles to customers. With countless vehicle leasing companies in India, you are able to drive more car than you can afford. If you have a knack for driving a super model luxury car beyond your budget range or you want regularly upgrade to the newest model every few years, leasing car facility presents this opportunity. However, this service comes with some restrictions such as you cannot drive the car more than the annual mile allowance set by the car provider. If you do so, you will be hit with fees.

Moreover, leasing service tends to be costlier in the long run. However, there are some conditions where leasing a car can be cost effective such as if you use leased cars used for business purchase, it can be deducted from your taxes.

Purchasing a new car:

Vehicles are the definitive example of a depreciating asset. You drive a new car for a minute and its value drops by a great amount. It will never again worth what you paid for it. Therefore, buying a car is meant to be cheaper than leasing in the long run. Once paid off your loan you still have a car that's worth money though less than you paid for it. Purchasing a car means you own it and you have the full right over it. You will have freedom and flexibility. This is your car and you can keep it or sell it. You will stay worry-free from annual mileage limit and much more.

Lease a car to buy:

There is one more option. You can lease the car to buy. Get the leased car for a year from a reputed vehicle leasing company in India, and then when the lease agreement comes to the end, buy the same car. You will be asked to buy the car based on its ‘residual value’. Or what the dealer or service provider estimates it’s now worth.

Once you decide to buy the leased car, it is good to compare the residual value your car dealer gives you to the car objective market. Search online tool to compare the cost. There are several portals where you can compare the residual value of the same car. If you find that the offer to buy your car is less than its market value, and you want to keep the car, this is a feasible option.

The bottom line is that leasing a car is a good choice but only when you are able to find a reputed vehicle leasing company in India and you need a vehicle for the time being. And if you want to own a car but the budget is not allowing, go for the third option. Lease the car to buy. 


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