Leasing VS Buying A New Car: Which Is Better?

The prospect of driving a brand new car will always be exciting to almost any driver, but being able to afford driving off the showroom floor with a new sedan or the latest sporty used KIA cars for sale isn't exactly within everyone's means. Not only that, but some people simply won't need to own a car for several years, due to work or other lifestyle preferences. For example, someone who is working a contract job and wants to buy a car in Johannesburg but intends to leave the country after their work contract reaches an end isn't likely to splurge on a new car, are they?

You may also be planning on downscaling but currently need a flashy, new car for the sake of your business or career. Fortunately, for these - and other - requirements, there is an option beyond purchasing a new car or having to rent one from a rental agency: car leases.

Leasing a car is essentially a semi-long term contract where you pay to drive a new vehicle for a set period of time. The contract periods vary but are typically set at 36 or 48 months. Once that contract reaches its end, you return the car to the lessor and can then decide whether you wish to sign up for a new car and lease contract or make other arrangements that will better suit your needs at the time. So, what are the pros and cons of leasing, versus buying a new car? For the sake of this comparison, let's assume that if you're buying a car, you'll be paying it off through a financing plan, as opposed to paying for it in cash.

Leasing A Car VS Buying A Car

As we've mentioned, leasing implies that you're just loaning the car, not actually buying it to keep. One benefit of this is that you won't be tied down to a longer-term payment contract, as you would be if you purchased a car through financing. Leasing allows you to drive a very new Kia Rio from Motus Select for example and return it after roughly two or three years, with the option to lease another brand new, recently released vehicle, after that. If you're someone who enjoys driving something new fairly often, leasing is a great option to keep you on-trend and eliminate any long-term financial or maintenance burdens.

What To Consider When You Lease A Car

You'll have an option to pay a deposit at the start of your lease. The higher the amount you put down as a deposit, the lower your monthly payment will be. Just bear in mind, you won't get your deposit back if the car is in an accident or stolen, even days after you start your lease - the lessor will be reimbursed by their insurance company, but you'll lose whatever amount you offered as a deposit. If you pay a deposit, keep this in mind and put a smaller amount down if you're not comfortable with potentially losing the amount you deposited.
There are mileage restrictions on lease cars, which means that, just as with a normal rental vehicle, you'll only be covered for a specific amount of kilometres. If you exceed that amount, you'll have to pay hefty extra penalty fees. If you're fairly certain of how much distance you typically cover in a month or a year, you'll be able to estimate with reasonable safety whether your lease mileage will be enough for your travelling habits.
If you're planning on leasing a car for a period longer than the normal three years, you'll very likely end up paying more for your lease car than what you'd pay if you bought a car. Lease cars work out more affordably on the short term, so consider how long you'll need the car.
Pros Of Leasing

Lower monthly payments. Compared to what you'd pay on instalments when you buy a new car, a lease car will cost you less, Rand for Rand.
No insurance costs. The car will be insured by the lessor, which means you'll have one less expense to worry about.
Drive the latest models, as they're released. This one speaks for itself, doesn't it?
No long term obligations. Once your lease period is up, you simply return the car to the company you leased it from and walk away. If you bought a car, you'd have to go through the process of selling it either privately - which means a lot of effort, negotiations and haggling - or scouting around for a dealership that will offer you a decent price for your car.
Cons of Leasing

Mileage limitations. As we mentioned earlier, you'll need to be very sure that you won't exceed the monthly or annual kilometre cap that is specified in your lease contract. Unless you're happy to fork out a few extra grand because of that trip out of town, think carefully about how much you drive and add a few extra hundred to the final sum, just to be safe.
You can't back out of your contract without worry. If, for whatever reason, you decide to cancel your lease contract early, be prepared to pay a penalty fee, as well as the remainder of your installations for the lease period. In this case, buying a car is a safer option as you can sell it whenever you need or want to, without incurring huge expenses.
You still have to take extra good care of it. Just because it's not your car, doesn't mean you're completely free of responsibility for a lease car. It's essentially the same as a rental in this regard: you need to return it in the same state you received it, or you'll be liable for repairs. In terms of servicing, maintenance and any replacement of parts due to wear and tear, you'll be just as responsible as you'd be if it were your car. Fortunately, most lease car contracts offer you the option to buy a servicing plan, and because it's a new vehicle, it will be under warranty for the most part. The vehicle will be inspected when you return it, and while minor scratches may be overlooked, fender benders and gross negligence will end up biting a chunk out of your bank account.
Overall, leasing a car is a stylish, affordable solution that is less constrained in terms of long-term responsibility. If you're aiming to have a car for many years, however, buying one will be more worth your money in the end. Whatever you choose, avoid the temptation of diving in headlong in a state of excitement. Do your research and you'll be driving in style and confidence in that sedan or used KIA car for sale that Motus Select has to offer.