So it’s time to get a new car, but you’re unsure whether leasing or buying will best suit your needs. Here at Nifti, we’re keen to help. Here are the most commonly asked questions when leasing or buying a new car.
What are the differences between leasing and buying a car?
The key difference is ownership. At the end of your lease term, the car must go back to Nifti, unlike when you purchase the car outright. This means the car is rightfully yours and you can do as you please with it.
What are the advantages of leasing a new car?
You will agree to a fixed term and know that you have a brand new car with a warranty for the duration of this lease period. You can manage your monthly budget more clearly, allowing you to accurately set aside car payments without the worry of a large depreciation hit or balloon payment at the end of the term.
What are the disadvantages of leasing a new car?
You won’t actually own your car and are tied into a Nifti contract. Should your situation change and you are not in a position to continue with the monthly payments, you may face fees for breaking the terms of your contract. Should this happen, you will need to inform the Nifti Customer Support Team and we will advise you on the process to end the contract. Our advice is not to stretch yourself with monthly payments. Build a Nifti leasing package that matches your monthly budget and lifestyle.
What are the advantages of buying a new car?
The car ownership is in your name and you are free to do with it what you will. If you fancy 20-inch wheels and engine modifications, then owning the car is the option for you. If your circumstances change, you can always sell the car and cut your losses. This is really only beneficial if you were in a position to purchase the car outright from the beginning. If you take out a loan, the bank or financial institution ultimately owns that vehicle until the last payment is made. In this way, it’s no different from a lease deal – only on a personal loan or personal contract plan (PCP), you have to be prepared to soak up the depreciation over the duration of the period.
What are the disadvantages of buying a new car?
New cars depreciate rapidly. Most new cars start decreasing in value from the day they leave the forecourt. This is where the saying “buy appreciating assets, lease depreciating assets” comes in. In most cases when people purchase a house they tend to go up in value over the course of the mortgage duration. This means you are making an investment in which you could potentially make a future profit. Cars tend to lose value over time unless you are in the collector market. With this in mind, leasing is usually better than buying and soaking up that depreciation. Buying outright or by using finance will also mean a significant initial outlay.
Still exploring your options as to what is the best option when driving a new car? Check out guide on Personal Car Leasing vs PCP Finance.
If you have more questions or want to learn more about Personal Leasing, check out our Help and Advice page.