Buying a new car or leasing a pre-owned model might seem attractive because they have longer loan terms. But the question is whether you get better value from purchasing or leasing a car since the initial price is higher for the latter.
In addition, both options come with their pros and cons. For example, leasing generally offers lower upfront costs, but maintenance fees can add up over time. Also, buyers often don’t realize the actual cost of ownership until after signing a lease agreement.
Consider the total cost before deciding between purchasing and leasing a car. This means knowing the full cost — the purchase price plus maintenance costs. Your decision depends on the type of car you want, its condition, financing options, and other important details such as mileage limits.
Are you planning to change your car and need advice on choosing the financing type?
When we buy any car in Dubai, we have two methods—purchasing with cash or taking out a car loan. Whichever option you choose, you become the owner of your car from day one. You will also be responsible for its upkeep.
- Buying your car allows you to drive without a mileage limit.
Some people might argue that buying cars is not strictly financial because you can save money by driving less. This may be true if you plan to only drive short distances or if public transport is available.
Buying a new car gives you access to all the latest safety features, comfort upgrades, and convenience options. It helps to maintain your credit score, and it’s a sensible investment whether years ahead you are keeping or selling the car in Dubai.
Besides, used cars can be cheaper than new ones, so might be a better option if you don’t know exactly what type of car you want. New cars often come loaded with extra features which you may not need. Thus, the best is to start looking at both: used and new options.
- On the other hand, leasing gives you the flexibility to ride the model you want. You can take advantage of all kinds of special deals and incentives, including free maintenance and insurance for the first few months.
A lease offers one big benefit: It costs significantly less than buying outright. The average price of a new vehicle financed through a lease, by contrast, is less than what it would cost if you bought the same car on credit. That savings could amount to hundreds of dollars at the end of each month.
- Rent-to-own is a method of financing consisting of leasing a vehicle for a period generally ranging from 2 to 5 years. At the end of the contract, the leader can opt to buy the vehicle, exchange it for a new model or return it.
Rent-to-own gives you the advantage of changing vehicles regularly and always benefiting from recent models with the best technologies. This method of financing also allows you to control your monthly budget and avoid the hassle associated with the resale of the vehicle.
However, rent-to-own has several parameters to take into account: the payment of high first rent, the limited mileage with penalties in the event of overrun, and the costs of interrupting the contract. At the start of the contract, expect to pay a security deposit (10 to 15% of the purchase price).
The best way to decide which is right for you depends on what kind of car you want. Do you plan to change vehicles every three years? Or do you already know exactly what car you want to drive next year? If so, buying may save you money now if you find a great deal.