When the time comes for you to look for a new vehicle, you might find that you are slightly confused by the options that are available to you.
However, with car finance and car leasing available to you, you might be wondering what the differences are between the options, so take a look and arm yourself with all you need to know.
Car Finance – The Advantages
If you own your own car, you won’t have to worry about any annual mileage limits and you won’t have to worry about paying for any damage to the vehicle.
When you purchase a car on finance, you can sell the car at any time or you can build equity in it which can help you to purchase a new vehicle in the future.
What’s more, if you own the car long enough, you will soon pay off the cost of the vehicle and have a car that is completely yours.
Car Finance – The disadvantages
If you purchase a car using finance, you are purchasing the car for the entire amount and that means that you are going to suffer from a loss in value the very moment you drive it away.
You will also have to factor in the maintenance costs that come with financing a vehicle.
However, should you choose to look for a new car in the future, if you choose not to part-ex the vehicle then you will have to go through the hassle of finding a buyer for it.
Car Leasing – The Advantages
Choosing to lease a car offers you a hassle-free way to own a vehicle. The monthly payments are set and you pay that for the agreed amount of time.
At the end of the agreement, you can then hand the car back and select another, making this a great choice for those who like to change their cars regularly.
You also won’t have to worry about the maintenance costs as they are included which can help you to lease a more expensive vehicle.
Car Leasing – The Disadvantages
Car leasing does not give you the same kind of freedom as car finance when it comes to mileage. The dealer will put a mileage cap on the deal and that means that you cannot go over it otherwise you will have to pay a charge per each additional mile.
Should you want to end the lease early, there will be a charge for this while you might be required to take out additional insurance as you are liable for any damage caused inside and outside of the vehicle.
Therefore, when you hand it back, you could be charged for any repair work.
While car leasing is an easy way of owning a vehicle, once the lease period has ended, you might not have anything to show for the money that you have spent.
You might have the chance to purchase the vehicle but even then, this will be at an inflated price, which means that you end up paying more.