This article looks at the three of the most common routes to owning your dream car; which are leasing, renting and owning – in order to work out the most cost effective option for you to get your dream car on your driveway.
- OWNING
This might seem like the most sensible choice, as at the end of the day, whilst buying a car outright – whether in cash, or on finance, is a significant expense, it is at least something you then own yourself. However, a car is a depreciating asset that loses its value with each mile you drive and with each day that passes. If you are to buy a brand new car, then as soon as you drive off the forecourt, the financial hit you can expect in terms of depreciation is in four figures!
The other thing to consider, is that there can be faults even with new cars – you will, of course find remedies from a lemon car lawyer to put things right, but a lot of people expect that shelling out for a brand new car will be a much lower hassle and more reliable experience than buying a second hand car, which isn’t always the case.
Buying a second-hand car, particularly one that is just a few months old, seems to be one of the smartest moves you can make if purchasing a car… yet owning an older car can come with a fair amount of hassle ,and even with an older model, the cost of insurance, road tax, servicing, maintenance and repairs can take its toll on your finances. This is where the less mainstream option of renting a car can pay dividends.
- RENTING
It might seem a strange idea to rent a car, as an alternative to owning one, but if you don’t always use a car (e.g. you live in a big city and commute to work on the train or metro) then hiring a car could prove to be the most financially beneficial to your situation. This way, you are only paying for the car when you actually need it. There’s nothing more annoying than paying for a 24 month lease, when you’re out the country for a few months, and the car is just sitting in your driveway… but one of the greatest benefits is that the insurance is included. When you consider how much insurance costs – renting a car that comes with fully comprehensive insurance can end up saving you money, particularly for inexperienced drivers, or those without a no claims bonus.
- LEASING
The middle ground between owning a car and renting one is to look into long-term leasing; that said you can find some incredible offers even on short-term premium car leasing.
The great thing with leasing is that you aren’t always responsible for maintaining the car in terms of servicing, and if something goes wrong with the car, you can simply go back to the leasing company and they’ll replace the vehicle. It’s a much lower hassle way of owning a car, but in reality, if you are thinking of purchasing a brand new car there shouldn’t be any mechanical issues to contend with that aren’t under warranty anyway.
Leasing can offer a hassle-free option, but the downside is you never end up owning the car, so a bit like renting a property – you’re not building any equity in an asset, however, with a car… it’s a depreciating asset anyway, so this shouldn’t be too offputting.
In summary, the right option for you will be heavily dependent on your individual circumstances, but your dream car is obtainable even if it seems out of reach at the moment – financial circumstances can change, there are fantastic deals to be had, and where there’s a will there’s a way!