Advantages Of Leasing A Car Over Buying

Mr Sunil Gupta Dec 29, 2020

Is it better to lease a vehicle or buy a brand new car? For some people, owning a car is the way to go. For others, from a financial perspective, it a huge expense one has to incur. Leasing, on the other hand, can be a less expensive option but one cannot own the car forever. So, whether to purchase a car or lease a vehicle, it’s important to understand the difference before you make a decision.

A new trend in the mobility segment

It is interesting to know that the purchasing power of millennials in India is significantly higher. But what’s even more surprising is how this generation is more conscious about its approaches before making a purchasing decision. Millennials live a carpe diem lifestyle. Yet, they also question the need for buying a car in terms of its long-term viability. This was clearly pointed in Deloitte’s 2019 Global Automotive Consumer Study, in which more than half of India’s millennials questioned the need for purchasing or owning a car.

Having said this, car ownership in India is still considered a status symbol. But with related hassles to this ownership such as inadequate parking space, rising fuel prices, insurance premiums, etc. people are gradually putting off their car-buying decision only to focus more on mobility to consequently fulfill their aspirations and ambitions

Moreover, we cannot ignore the uncertainties brought by the ongoing COVID-19 pandemic. During such testing times, that left a harsh impact on the economy and when a large number of people lost their jobs, buying a car may not be a feasible solution for all. One would rather channelize money to build assets that appreciate instead of paying off the loan on a depreciating asset and by that time the cars will also demand higher maintenance. These factors together are influencing consumers' who are now slowly moving from owning to leasing. So, let us take a look at a few advantages of leasing a car over buying.

It is flexible

Opting for the tenure and mileage as per need and be able to recalibrate it as you go along

Use the car of your choice giving you the same convenience when you own one and switch to another one whenever you want

By now we have understood that car leasing is likely to become a preferred option for the masses. But why?. The biggest pull for customers is flexibility. Car leasing offers that. In fact, leasing a car is suitable for those who like to experiment and drive a new set of wheels rather than sticking with one car for a long time.

It is affordable

It's true that buying a car typically requires a hefty down payment, as opposed to leasing. A car lease payment is significantly lower than your monthly loan repayments would be if you were purchasing the same vehicle and financing it with a traditional personal auto loan. So, for many, they would want to stick to a shorter lock-in period and reasonable pricing. A leasing model allows people to use the same car by just paying monthly or yearly charges.at significantly reduced outflows – basically, you pay for what you use

Convenience

Indeed a hassle-free affair with no down payment to be made. In addition, leasing charges include all costs towards registration charges, maintenance, insurance, and all related services that take care of risks and hassles for the consumer so that he can peacefully and simply use the car the way he wants, anywhere in India, during the period of lease these are the reasons why leasing service is becoming an affordable and convenient option.

Other benefits that one does not immediately realize

It can be frustrating when a newly purchased car faces a major mechanical issue shortly after the warranty runs out, disputes on insurance claims, and related indirect costs. In such a case, the costs of all repairs fall on the consumer. Resale values apart from the overall upkeep of the car get impacted due to several external factors not within the control of the consumer, like the introduction of new car models/ upgrades every 2-3 years and changing technologies. Leasing a car eliminates all such problems.

Moreover, driven by the need to offer sustainable mobility that is both cost and energy-efficient, car rental service providers are investing heavily in new-age technologies such as AI, ML, and Data Analytics thereby offering the best user experience to the consumers.

Conclusion

We are observing shifting preferences and the practice of buying or owning a car is fast being replaced by leasing a vehicle for personal use. Rather, it is gaining traction for the advantages it offers to the new-age customers including flexibility, affordability as well as convenience. And, leasing a car over buying is here to stay and will continue to gain popularity in the years to come as a promising solution for safe personal mobility