Loan and buy, or lease?
“Don’t buy a new car. You’ll need a loan. It’s a waste of money. You’re better off leasing.”
Sound familiar? But then you also hear this. “You’re crazy leasing. It’s too complicated. Just organise a loan and buy what you can afford.”
When it comes to buying a car, everyone is an expert.
Buying a car with a loan, or especially with cash, is fairly straightforward, and has many advantages. A loan can offer flexibility and be tailored to suit your financial situation.
When you buy you can also customise and nominate your accessories. And there’s no limit on the amount of kilometres you can drive. It’s your car.
But there are disadvantages in the process. First comes the haggling with a dealer over price. Then the cost of maintenance can be a problem, depending on warranties, or if you have bought a second-hand car.
Leases have disadvantages too. They can be highly regulated and come with terms and conditions. Some leasing options can place restriction on the price or age of the car, wear-and-tear stipulations, and kilometre limits. Exceeding any of these conditions could lead to unforeseen costs.
Some leases may require salary packaging based around the commercial use of the vehicle.
But don’t let all that deter you. Leases require less up-front cash than when you buy. And a single monthly consolidated payment that includes a maintenance package might help with your money management.
A novated car lease (salary-packaged car) can be an economical option with potential tax benefits.
If you are considering leasing we recommend you talk to a financial adviser to see which solution is right for you. Or talk to us.
We can package financing options for you through our partners at Lend Advantage.
Whether leasing or buying, you are better off using Auto Advantage. If you are in the market for new car, we can save you time, money and stress. Relax and let us do the negotiating.