Whether it’s you first in a long time, or you’re a regular when it comes to buying new cars, you may be wondering if you’re getting the best deal financially. There are many ways of getting your hands on a new car these days, and of course always the option to buy used vehicles. Let’s take a look at the different ways of purchasing a car and break down everything you need to know about each method. Here’s everything you need to know about purchasing a car.
Buying New vs Leasing
Different people will tell you different stories about leasing or buying a new vehicle. We’re here to talk to you about facts. Let’s look at some of the benefits and drawbacks of either buying or leasing a new car.
Firstly let’s discuss some of the positives about actually purchasing your own car rather than leasing. Of course, you get the enjoyment and thrill of buying something brand new, for you. It’s shiny, new, fast, and all yours! This is great and would make most people feel amazing. On top of the feeling of buying something new and quality for yourself is the benefit of manufacturer warranties. Most new cars come with a warranty for a fixed period of time to cover mechanical faults, windows, bodywork, and more.
This usually means that if any parts of the car fail and it isn’t your fault, the manufacturer is liable for replacing those parts. Many companies offer extended warranties for an added fee. Also, when buying brand new from a dealer or manufacturer, you get the chance to customize your vehicle. Choose your color, radio, seats, and more. This is why many dream of getting a car for themselves.
There are, however, some drawbacks with all of these wonderful features of purchasing a brand new vehicle. Buying usually comes in at a high cost, meaning very high monthly payments or a large up-front deposit. And, we’ve all heard the classic line “as soon as you drive the car out of the dealership it starts losing value”. This, sadly, is true. You will never recoup the money spent on purchasing a car, and with a standard road car, you’ll be lucky to recoup half. A car isn’t a long-term investment in this way.
Leasing tends to come in a little cheaper than buying. There’s usually no up-front costs, and you don’t need as many financial checks as you aren’t actually purchasing anything. Leasing is simply a rental contract, much like your phone. Much like when you purchase a new car, a leased vehicle will usually come with a warranty or guarantee. Any faults that occur on the car during your contract will usually be covered by the leasing company meaning you don’t need to splash out on any repairs.
Another benefit of leasing is the fact that you can get a short-term contract. Many purchase plans cover 3-7 years of payments, whereas a lease can be as short as twelve months. This means you can get a new car every year if you wish! Or, take out a longer plan to have even lower repayments.
However, there are of course some negatives to leasing. As we have mentioned, you do not own the vehicle you are leasing. As it is owned by a private company you can be subjected to regular vehicle checks, or be hit with hefty fees if any damage ever does occur. You are at the mercy of your contract so be sure to have checked it over thoroughly before signing. You may also be limited on your yearly mileage, meaning any spontaneous trips away could be cut short by your lease mileage agreement.
A quick word on buying used. This could be from a specialist used dealership or from a private seller. The benefit here is of course the initial price. Buying a five-year-old car is going to be a hell of a lot cheaper than buying a brand new Mercedes! Buying used may also feel good as you are keeping a car going rather than it being wasted. However, there is always a risk.
The car should be properly checked over for any faults. Sadly, even if faults don’t exist, they can certainly happen much quicker in a used car than a brand new one. This can lead to unexpected costs as you almost certainly won’t be covered by any manufacturer warranty when purchasing second-hand.
In the end, the choice is yours and yours alone to make. Maybe the positives of buying new massively outweigh anything else we’ve mentioned, and that’s totally fine! Just take a look at the pros and cons we have discussed and see which suits you and your financial situation best. Whatever you choose – enjoy the ride!