Why Leasing Your Next Car Could Help Save You Thousands
Having a car is a huge financial commitment, whether you opt for a lease on a new vehicle or choose to buy a slightly older one. However, having the use of a car doesn’t have to cost you the earth. Whether you’re saving for retirement and just want something low-cost or you want a little luxury in later life and are considering a Range Rover lease, you still shouldn’t be paying over the odds. Here’s why leasing your next vehicle could be the next smart financial move you make.
When it comes to buying a car, think of all those up-front costs within the first few months. There’s the initial lump-sum deposit with your finance deal, then there’s the monthly payments with interest and the running costs including petrol, parking, and so on.
When you lease a car, you won’t need to save for months for a deposit because little to no down-payment is needed and all those monthly installments will be far less. In short, you can go out tomorrow and lease a car with no problems, but buying a vehicle is a very different story.
Depreciation on a new car
With each passing year and new owner, a car decreases in value. Despite it being fresh off the factory floor, you can lose thousands on a new car simply by driving it off the lot. Depreciation can amount to as much as 19% in the first year depending on the car, but when you take out a lease, you haven’t made any initial payments on it so you aren’t facing a loss of thousands.
If you’re planning on buying a car on finance but only keeping it for a few years, work out what the depreciation would be of the model against a lease. If the loss and payments you’d make together equate to more than the total cost of a lease in that time, it won’t be worth buying.
What if things change?
Another way that people always lose money when buying a car is through not planning ahead. Although it’s easier when you’re over 50 to think about what the future will hold for you, things can still change. Will you be moving to sunnier climates? Might you decide to ditch the car altogether?
If the answer is yes, then getting tied into a finance agreement on a new car is the worst thing you could do, and having to pay your way out of it could make a huge dent in your finances. If you think your circumstances could change in the near future, leasing could save you not only hundreds, but also a lot of stress and anxiety.
Did you lease or buy your car? Let us know your thoughts on this debate below…
This is a collaborative post.