Call us on 1300 794 893

Your Money

Is it better to buy or lease a car?

If you like a new car every three years that is always under warranty, and like lower monthly payments, then leasing should be considered. Other issues such as the number of kilometres you drive, whether you care about equity you have in the car and whether you might want to keep the car, can affect your decision.

If you buy, you will have higher monthly repayments but there will be no big pay out at the end of the contract. If you want to jazz up your car to suit yourself, then buying makes sense. Also, the experts say if you want to keep the car for the long haul and you drive above-average distances, then buying might be a better option. Also if you like to run your own maintenance program, being a buyer of a car might be the go.

People say for the same car, same price, same term, and same down payment, monthly lease payments will always be significantly lower than loan payments.

If you sell the leased car at the end of the contract and it’s in good condition, the overall cost, especially if there are tax deductions, can come out very close, either buying or leasing.

However, if you keep the vehicle after the loan ends, then being a buyer is cheaper.

My tip is to select a car that has a great history of maintaining value over three years and then shop for the lowest bank loan for a car and then shop for the best lease deal. Don’t just go for the dealer’s deal! Then actually do a three-year test of outgoings, deductions etc. and see what really works for you.

For advice you can trust book a complimentary first appointment with Switzer Financial Services today.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Published on: Friday, September 17, 2010

blog comments powered by Disqus
Pixel_admin_thumb_300x300 Pixel_admin_thumb_300x300 Pixel_admin_thumb_300x300