Automotive & VehiclesFinance

Should you buy or lease a car? Which is the best option?

Buying and leasing cars have always been viable options for car ownership. More recently, since COVID-19 forced many of us to avoid public transit for fear of getting the virus, the need for a car has skyrocketed. Many families have had trouble commuting in recent months due to a lack of personal transportation. However, not everyone is financially capable of purchasing a car or interested in owning one for an extended period of time.

Leasing a car

Leasing a car has grown increasingly popular in India in recent years since it allows you to drive a new vehicle without taking out a loan or paying a huge quantity of money. You may only need to pay a small deposit and then make regular monthly payments for the duration of the lease. You have the option to extend the lease, return the vehicle, purchase it, or trade it in for a new lease at the conclusion of the term.

Benefits of leasing

No need for a loan:

You must make monthly payments while leasing a vehicle. However, this differs from asking for a loan and paying monthly EMIs in that the lease does not have to be for the entire car, whereas EMIs are for the entire loan plus interest. Furthermore, applying for a loan is an important step that is often skipped.

You can enjoy a new car periodically:

This is perhaps the nicest benefit of leasing a car: you get to drive a variety of cars without having to buy them after each leasing period. This is ideal for vehicle enthusiasts as well as people who are undecided about which model to purchase.

No hassles of selling and buying:

When you lease a car, you don’t have to bother about making it ready for viewing, vetting purchasers, negotiating a price, or dealing with the title transfer once you’re done with it. The dealership will handle the paperwork after your lease is over.


Usage restrictions are strict:

When you lease an automobile, you must adhere to the leasing company’s terms and conditions, which are frequently strict. This is in contrast to the autonomy that comes with owning a car. This means you won’t be able to upgrade your vehicle’s music system, put on a new wheel cap, or add an accessory! Some firms also set a limit on how many kilometers you can drive in a year, and if you exceed that limit, you will be charged accordingly.

Expensive in the longer run:

In a year or so, a monthly lease of ₹15,000 can soon mount up to a score of a few lakhs. As a result, leasing makes sense only if your usage will be limited, you want to explore your car options, or you don’t want to be tied to the inconveniences of car ownership.

Buying a car

Buying is more difficult than leasing, but it is a rewarding experience in the end. You can buy a new or used automobile, you have various brand and price alternatives, you can choose any model that matches your needs, you can choose the type of gasoline, and the possibilities are truly unlimited. A few advantages are listed below.

Benefits of buying

Full ownership of the vehicle:

It’s simple: once you buy it, it’s all yours. You are not responsible for any modifications you make to your vehicle, the number of kilometers you drive, or the number of scratches you cause.

Easy EMI Options:

Although you must pay the car dealer in full. You can always take out a vehicle loan and pay low EMIs. If you have a strong credit score for a personal loan, you can get a fair interest rate of 8 percent to 11 percent on new vehicles and roughly 14 percent on used vehicles. The EMI cost is usually less than the monthly payments you make when on lease.

It’s always possible to sell it:

With so many buying and selling platforms accessible nowadays. You can always sell your present automobile for a good price and buy a new one after you’ve outgrown it. You’ll also have a lot more cash on hand than you did before you bought the car.



You’ve probably heard that a car’s price reduces the moment it leaves the dealership. While this is true for some assets, it is true for all.


Purchasing a car is only the beginning; it demands extensive upkeep, each of which is costly.

The importance of credit scores in car purchases and leases

Your credit score is typically closely tied to your chances of getting approved for a vehicle loan and the interest rate you’ll pay. If you’re looking to lease a new vehicle, it’s ideal to have at least decent credit. It’s helpful to know your credit score before you start the procedure, whether you’re buying or leasing. Before you lease or buy, check your online credit score to determine where you are and seek strategies to improve it.

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