You love having a car, but you hate paying for servicing. When a car gets a bit long in the tooth, you’d much rather have something brand new. You’d rather someone else deal with registration and insurance. Selling your old car just to start the process all over again? I’d rather tear my hair out!
Does this sound like you? If so, you may be the best candidate for leasing instead of buying a car outright.
Though each have their own advantages and drawbacks, car leasing could be a great option for women who only commute every so often and need something to get them to appointments and bringing back groceries and bits and bobs. What are your choices when it comes to leasing? Learn about leasing below.
The primary benefits to leasing
Leasing is paying a flat monthly (or fortnightly) fee to access a car for certain period, usually about two years. In many (but not all) cases, a lease payment comes out to less than a comparable car loan payment, and includes your scheduled servicing, maintenance, registration, and insurance. This applies unless you opt for a ‘non maintained’ lease, which does not include these features. This makes a lease car easier to budget for compared with a car loan, as you must handle all these mechanical and administrative costs. At the end of a lease, you can hand the car back for a newer model, as long as you fulfill all the requirements (see below.)
Leasing also means you can use a much newer vehicle, such as newer electric vehicles, for a fraction of the cost of buying outright.
Novated leasing and tax advantages
A lease that’s becoming popular among professional women is novated leasing. Novated leasing means you don’t have to pay for your lease out of your own pocket – it is deducted from your pre-tax income, which has the added benefit of bumping your pay into a lower tax bracket. Your employer pays all the costs to a finance company (that includes all of the aspects above, plus fuel!) Your employer also claims the GST paid on the car and passes on savings to you. At the end of the lease, you will need to pay off the residual (remaining value). You can sell the car and keep any profit you make, pay it off yourself and keep it, or extend the lease.
The perks of buying
Though buying can be a bit of a drag, it does come with benefits. You own your car outright – and are responsible for all the expenses to keep it running – but you can also drive it without mileage restrictions. Many leasing companies may penalise you for driving over a set number of kilometres, if the car is in poor condition, or has been modified in any way. Unless you ask for a residual (balloon) payment at the end of a loan term, your repayments are set until the car is paid off.
However, if you feel that leasing is the way to go – get going! It can be a rewarding and low-cost way to get behind the wheels of a new car faster.
