Car Lease vs Car Loan: Fresh view in the new normal
Today, buying a car doesn’t necessarily indicate success. This brings us to the burning question: Should an individual lease a car or buy one on loan?
Over the years, we have played witness to lifestyles becoming increasingly fast-paced. One such change in recent times is the emergence of the sharing economy. This means that people now might prefer to own less and rent or lease more. Look at it this way: when it came to previous generations, the idea was to own, own, and own. For instance, they took out a loan to buy a car. However, for numerous reasons, the barrier to ownership is somewhat breaking down. Today, buying a car doesn’t necessarily indicate success. This brings us to the burning question: Should an individual lease a car or buy one on loan?
Leasing may fit your needs
Now when it comes to leasing, you can lease the car of your choice, whenever you really need to, whether it is to go out on a date, take a road trip with friends, or cruise down the highway with the cool breeze in your face. In fact, it has been discovered that leasing offers you the car of your choice without paying full price for it. Thus, it makes more sense to lease and subscribe especially with a depreciating asset.
Leasing means minimal maintenance
No matter what car you buy, a lot of time and money will go into maintaining it in the long run. Plus, the younger generation has taken notice of the struggle it took to maintain the car as it eventually lay broken down in their garage. Once, the pride of the family, now just a car that nobody wants to drive. So, for people who would rather save to spend on a car of their choice, leasing the car becomes the smarter option. They don’t have to constantly worry about bearing this major responsibility when they can lease it and return it as desired. Plus, nobody likes to take care of the maintenance of the car, pay for the insurance and cost of repairs. Hence, leasing the vehicle eliminates these costs and chores.
Loans are a long-term commitment
Most millennials have grown up witnessing the older generation struggle to pay the car loan just to fit in with society. Thus, they changed the game. To put things in perspective, car loans require heavy investment. The customer will have to pay a down payment, which, sometimes is a significant amount of the total cost of the car. Another factor is that even though customers buy the car, it is hypothecated to the lender until they repay the entire loan. On the other hand, leasing involves no conventional financing such as a heavy down payment or monthly EMIs.
Moreover, leasing also works in favor of those who like to experiment with a new set of wheels and not stick to one car for a longer period of time. It further provides consumers the flexibility to upgrade or downgrade the car based on their requirements and convenience. And, of course, they don’t have to be concerned about whether anyone will buy the used car. What one needs to take care of when leasing a vehicle is paying the monthly rental charges and having a good credit score.
So, considering the aforementioned factors, it is fair to mention that car leasing is gradually gaining traction, more so, in the new normal era. Though it isn’t a new mobility solution, the coronavirus pandemic has added further impetus to this trend as people today are prioritizing a personal mobility solution that is both safe and affordable. Evidently, people’s mindset is changing who is gradually putting off their car-buying decisions. They are in fact keen on owning a mobility solution that is not just economical but provides flexibility as well as privacy.
Well, in such a scenario, car leasing is playing a game-changing role. And, looking at the growing trend coupled with the fact that the global automobile rental and leasing market is expected to reach a valuation of $492.6 billion by 2025, it is thus safe to mention that car leasing models will be transforming the existing ways of mobility in the new normal era.
