Why leasing a car could be far better for your wallet than buying by Michael Fennel

Tuesday, 3 January 2017
Most people these days are always on the look-out for new ways to save money. Did you know, though, that your car could be the main culprit in hindering your attempts at financial freedom? More and more people are choosing to go down the car leasing route rather than buy their next vehicle for that very reason, and here are a few more in case you still need convincing…

1. Monthly costs go down

You’re probably aware of the fact that cars decrease in value with every year. However, when buying a car that’s new, you either pay the total “new” value of the car upfront, or you purchase the car on finance, in which case you pay a set monthly fee. By contrast, leasing a car gives you far better value for money; as it depreciates with age, the amount the car is worth is recalculated and then reflected in your instalments.

This makes a win-win situation for you; you can either trade in your car for a newer model and keep the same monthly figure, or you keep it the vehicle with less money coming out of your bank account.

2. More accessible money

When you first go to buy or lease a car, you’ll need to hand over a deposit, but in the case of leasing, this is often a much lower figure. If you’re in desperate need of a car for a new job, but have very little saved, this can be a huge weight off you mind, and in some circumstances the down-payment can be waivered completely.

As far as the monthly leasing payments go, these are also typically far less than equivalent finance payments, meaning you’ll have more disposable income freed up for you to either invest in other areas, use for emergencies or top up your savings.

3. It could make you money

It’s not surprising that so many young professionals are taking this option, when you look at the number of start-ups and new businesses that are springing up. All of those need capital to get going, so they don’t have the money to spend on a new car, but how do they impress all those potential clients? Perhaps the car doesn’t ‘make’ money in the traditional sense, but your new leased car could be the deciding factor in a major new deal.

If you turn up in an old, spluttering vehicle on the day of your big meeting, the client will automatically feel uneasy that you can deliver what you promise. It tells them that you’re currently not successful, and perhaps you don’t have the experience required to handle a business like theirs. Cars have a big impact on image, so make sure that you’re not the one missing out when you can easily get a brand new model on a lease.

Michael Fennel works as a journalist for a publishing company and loves technology and cars. He has been writing about everything gear related for five years and would like to become a racing driver.