Deciding to Lease or Buy Your New Car

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.

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