When it comes to getting a car motorists these days have a number of options open to them. This includes purchasing a brand new vehicle, buying a used vehicle from a dealership, purchasing a used car from a private seller, or even leasing a vehicle. According to recently released data, the option of leasing a car is becoming more and more popular amongst motorists with many now choosing to do this rather than buy a car. However, some experts believe that this may not be the best move particularly over a long term.
The figures from Experian Automotive show that since 2008 leasing rates have increased by a massive 76 percent. Nearly one third of vehicle transactions in the final quarter of last year related to leases rather than purchases, reflecting the surge in popularity over recent years.
Pros and cons of leasing
Officials have said that leasing comes with both pros and cons, adding that motorists needed to ensure that they weighed all of the pros and cons up before making a decision with regards to whether they should buy or lease a vehicle. One of the key benefits of leasing is the fact that the driver regularly gets a new vehicle, which means fewer repair issues and problems to worry about. Another main benefit that draws people towards leasing a vehicle is that the monthly payment tends to be lower than payments on finance for purchasing a car on top of which there is no down payment required.
However, experts have said that there is also a downside in that many of those that decide to go for the leasing option get stuck in a rut where they continue leasing for many years to come. This is because they are not making any equity, which makes it hard to raise the money to put down a deposit and actually purchase a vehicle. Many also get used to paying the lower monthly cost that comes with leasing, which means that they are less likely to want to increase what they are paying out each month by taking out a loan to purchase a vehicle.
Another official added that lease companies were now pulling out all of the stops in order to encourage drivers to go for leasing rather than buying, which included offering a range of great deals and throwing in extras with the lease agreements.