Should you Lease or Buy Your Next Business Vehicle?

This is a question many Australian businesses are asking more than they did a decade ago; in recent times, leasing a vehicle has become a viable alternative to purchasing or renting one.

There are many reasons why you may need a new car. Public transport is not reliable, and your family needs a second car, your current vehicle is no longer roadworthy, to name a few.

Cost

When it comes to the price of financing vehicles every month, leasing is the cheaper option. You will get to pay considerably less monthly when compared to a purchased automobile.

If you find the process of saving up for a vehicle or taking out an automobile loan stressful, then you may want to consider leasing as it gives you more financial freedom and less burden on a monthly or quarterly basis.

If buying a car using a car loan, you may want to do a car loan comparison and will need to factor in the interest repayments, on top of the monthly cost of the loan. This can work out more expensive than buying a car outright or leasing one.

Variety

If you are excited about the thought of changing vehicles every twenty-four or thirty-six months, then leasing is probably your best option.

You can lease a vehicle, and after a mandatory period, you can decide that your taste or needs have changed and ended your contract or trade-in your vehicle for a new lease.

It is easier to accommodate a growing family with a lease as you can change vehicles according to your needs.

Protection

It can be very frustrating when your brand new vehicle develops some mechanical fault soon after your warranty period ends.

It is worse when you do not have comprehensive automobile coverage.

A lot of Australians have to foot a significant portion of the bill for such repairs.

When leasing, you do not have to worry about your automobile developing a fault; you are almost always fully covered under a lease.

Mileage

If you want the freedom to make use of your vehicle as you wish, then you may want to consider purchasing a car rather than leasing.

The majority of lease contracts limit how many miles you can drive a vehicle, and the typical allowance usually hovers around 10,000 miles per annum, it can be higher or lower depending on your dealer.

The average driver will drive more than 10,000 miles per year, so this is worth considering.

Long-term Cost

When we take an in-depth look at leases, you may end up paying more for a leased vehicle over time that is if you stick with the same car for a considerable amount of time.

When you consider monthly payments over an extended amount of time coupled with additional fees like fines for exceeding mileage limit, extra fees, and end-of-lease costs, leasing may end up costing you more in the long term.

Ownership

There is no feeling like that of ownership. Owning a vehicle affords you the freedom to do whatever you want with your car without the fear of retribution or fines from your dealer.

When you own your vehicle, you can customize it to your heart’s desire, drive it for as long as you wish, and sell it when you feel like it.

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Consider your Situation

We can keep on listing why leasing is better than buying or why buying is smarter than leasing, but that is not the point.

There is no right or wrong option; it all depends on what suits your situation best at the time. Consider the pros and cons of both and financially consider the best option for you.

This may require a bit of homework on your part, but it is worth doing the research.

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Shashank Jain, founder of good-name, a young and energetic entrepreneur has always been fond of technology. His liking for technology made him go for engineering in computers. During his studies, he learned & worked on different computer languages & OS including HBCD, Linux, etc. He also has a keen interest in ethical hacking.

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