Car leasing is a feasible and convenient auto financing option for people who want to own a car in the UAE. However, many people often get confused about whether they should buy a car or get a leased one. However, to lease or buy a car completely depends on three factors:
- Frequency of driving (miles you’d put on the car)
- Your budget
- Purpose of getting a vehicle
Hence, whenever you plan to invest in a vehicle, the choice between buying or leasing a car can be tough. We have compiled a comprehensive guide about leasing versus buying a car along with its pros and cons.
Is Leasing or Buying a Car Better
When you lease a car, you sign a lease agreement and get a vehicle on a rental basis for a specific period. On the other hand, buying a car is completely different. It means that you become an owner after making a lump sum payment or through a car loan that is paid in instalments.
What is Car Lease
Leasing a car is different from renting it. When you lease a car, you pay an amount for the right to drive a vehicle for at least 1 year. However, the duration vary from one provider to another. The longer the duration of a car lease is, the more amount you will save. You can also extend the lease period or buy that car at the end of the tenure. If you want to lease a car in Dubai, this guide can help.
Pros and Cons of Car Leasing
Here are some advantages and disadvantages of leasing a car:
Pros of Car Leasing
- Lower monthly payments: It is one of the greatest advantages of leasing a car. In leasing, you opt for monthly payments instead of paying the entire value of a car. Your monthly rentals cover the vehicle’s maintenance cost, car deprecation and other expenses over the lease term.
- Lower repair costs: Most repairs are also covered by the manufacturer’s warranty. However, always review your lease agreement and maintenance warranty agreement. However, the car warranty coverage depends on the its type. Hence, check what types of car maintenance are covered to avoid unexpended expenses.
- More vehicles to choose from: Another advantage of a car lease is that you can drive your dream car without spending a fortune. Leasing a car offers you flexible vehicle options so you can request another car at the end of your lease period. However, please note that you might have to pay more if you choose a more luxurious option than the previous one.
Cons of Car Leasing
- Limited mileage: Most lease dealers limit the car’s mileage from 16,000 km to 24,000 km per year. However, you will be charged a higher rate if your mileage is higher.
- You can’t build equity: You cannot claim any ownership on leased cars unless you exercise the lease to own a car Dubai option.
- Excess wear and use could cost you: You also need to pay the repair cost that exceeds the agreed coverage.
Buying a Car
To buy a car means you have ownership of the asset instead of leasing it for a short period. Also, buying a brand-new car can be costly for some people; however, you can also opt for other options such as used cars and car loans. Besides, some official dealers also offer lease to own car. Hence, once you pay the amount, the vehicle officially becomes yours.
Pros and Cons of Buying a Car
Following are some of the advantages and disadvantages of owning a car.
Pros of Buying a Car
- No long-term debt commitment: One of the best advantages of choosing to buy a car with cash is that you won’t have to commit to long-term debt only if yo buy on cash. This will allow you to be in control of your money and not feel pressured to buy more than you need.
- Ownership: Either you are buying car on cash or via loan, at the end you will get the ownership of the vehicle and can keep it as long as you want.
- The ability to sell or trade in the vehicle: Once your auto loans are paid, you can sell or trade your car when ever you want to buy a new one.
- No mileage limits: Unlike the leased car, you don’t have to worry about the mileage when driving your own car.
- Less cost on possible repairs: It is mandatory to have car insurance in the UAE. Hence, you can buy a policy that covers you better in cases of minor collisions or wear and tear caused behind the wheel.
Cons of Buying a Car
- Cost: Buying a car requires a large payment to be made either as a full payment or as a down payment for instalments. Also, you need to pay for its insurance and registration.
- Long-term maintenance costs: Owning means you need to pay for all major and minor repairs. However, several minor car repairs can be avoided by keeping a check on your maintenance checklist.
With this, we conclude our guide on leasing vs buying a car. If you are looking for car lease options in the UAE, then find all the relevant information here. Whether you want to lease a car or buy one, having a UAE driving licence is a must in both cases.
People looking for affordable used cars for sale in the UAE can find a range of options here.
If this guide clears the difference between a lease or buy a car, stay in touch with UAE’s leading blog for more.
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