Many people weigh up the pros and cons of leasing versus purchasing their next new car. If you’ve never leased a car before, it can be a daunting process. There are a lot of factors to consider when weighing up the choices. Here are a few of the pros and cons to consider with a salary sacrificed lease arrangement.
Pros of Leasing
- Paying for the cost of the car’s finance, after-market services, petrol, servicing and insurance expenses from before tax income
- The leasing agent handles the ordering of the car and accessories, insurance etc on your behalf
- Don’t pay GST on purchase price of the vehicle
- Reduced vehicle purchase price often based on the level of discount your employer is entitled
- Enjoyment of a new car that you may not otherwise be able to afford to buy outright
Cons of Leasing
- Take home pay reduces as lease payments are taken directly out of your salary
- Unlike a car loan you don’t own the car outright at the end of the lease
- If you decide to keep the car at the conclusion you either need to find a lump sum or sign up for another lease period
- Choice of car dealership may be decided by the leasing company
- You decide that driving cars that are never older than 3 years is the way to go and you are always leasing a new car!
It’s a bit of a maze but it’s worth putting some time into the research to decide if salary sacrificed leasing is for you.
*The information contained in this post is a guide only. You should consider your own financial situation when deciding how to finance a new car.