While both leasing and buying a car have their own benefits, which one is better mainly depends on the customer’s needs and wishes.
Leasing a Volvo certainly has some benefits, including giving a car buyer options and more freedom. A driver can lease a vehicle and then exchange it after some years when the contract ends. Meanwhile, buying a car has its own benefits, including owning the vehicle outright and being more affordable if you keep the car for many years.
Leasing vs. buying a car
Leasing: Cheaper upfront and less to worry about
Leasing a car means that the user pays a down payment upfront and then pays a small monthly payment to use that car. The car is not owned by the user. However, drivers usually have the option to buy the car at the end of the lease contract.
In leasing, the leasing company gives certain conditions. One of the biggest conditions is the mileage range. The driver cannot exceed a certain mileage range over a year. Otherwise, there will be a fine. Another disadvantage is that the driver cannot end the lease agreement before the agreed time without paying a fee.
With leasing, sometimes you eventually end up paying more overtime than when buying a car outright. The monthly payments include the depreciation value and interest which makes the car much expensive than buying.
Benefits of leasing
There are many benefits of leasing a car, including:
- You get the opportunity of exchanging the car once the leasing term ends
- Cheaper up front for a brand-new car
- The monthly payments are often not that much
- You get the top-of-the-line insurance and coverage
- You don’t have to worry about mechanic bills
- You don’t have to worry about the car when it gets old
When the lease contract ends, usually leasing companies give 3 options to the customers. They can lease another car and enter into another leasing contract. This way, the customer can experience another new car and top features. The second option is simply walking away, choosing to lease their next car through a different leasing company or buying a car instead.
The last option is they can often buy the same car they’ve been leasing. Some people don’t want to change their cars, so the leasing company will let them buy it outright or through a monthly installment loan.
Buying: Own your car outright and do what you want with it
Buying a car is simple. It has no complexities like leasing a vehicle. You just have to have the money to afford it and head to the nearest car dealership.
Benefits of buying
There benefits to buying a car upfront include:
- You will own your car outright.
- You don’t have to worry about monthly fees.
- You can go wherever you want without worrying about the mileage range.
- You can customize your car according to your wishes.
- You can resell your vehicle anytime you want
While there are some benefits of buying, there’s definitely a disadvantage of paying a lot of money upfront. Not every person has that much money at one time. You can always get a car loan, but that brings its own set of disadvantages like wasting money on interest.
Volvo leasing contracts
Volvo has a very good leasing policy to attract customers. The leasing policy includes GAP insurance which gives certain benefits and covers whole maintenance with certified Volvo parts.
Variety and short-term affordability vs. freedom and long-term affordability
Leasing has advantages if the user wants to experience different cars. In leasing, drivers can also have a new car for their family, even if they don’t have a large amount of money at one moment.
Buying the car has the advantage of customization and driving freely. They can go wherever they want and use as many miles as possible without worrying about any leasing contracts.
Therefore, it all depends on the buyer. The customer needs to decide what he wants. If they are looking to change their car after a couple years anyway, then surely leasing is the better choice. But if someone has the amount to buy a car and plan to own it long term without complexities, then buying is the way to go.
FAQ
What happens if a leased car is crashed?
Hopefully you won’t have to pay anything, but you may have a deductable.
When you have an accident then it is compulsory to tell your leasing company. You will actually owe the leasing company for the worth of the vehicle when an accident happens. Be that as it may, your insurance should hopefully cover any expenses.
If your car is completely totaled, then the insurance will give you money equal to the current value of the car. This money is then paid to the leasing company to break even. Unfortunately, in many cases, users owe the leasing companies more money than the insurance paid for it. In this case, check if you have GAP insurance that can cover some of it. Volvo leases offer GAP insurance.
Who pays for the maintenance of a leased car?
Who pays for car maintenance depends on the terms of the lease. Often, leasing companies will pay for maintenance, but specific terms will need to be followed. For example, the fine print may say that if the driver doesn’t follow the maker’s recommended maintenance plan, then car maintenance will not be covered.
How many miles can I put on a leased car?
In usual leasing contracts, the borrower has annual mileage limits of 10,000, 12,000, or 15,000 miles. If someone exceeds this limit, then they would have to pay a fine at the end of the leasing contract. An example of the fine is something like 30 cents per additional mile at the end of the lease.
What credit score do you need to lease a car?
According to NerdWallet, the credit score (FICO) needed for car leasing usually differs from dealership to dealership. However, the minimum credit score should be 620. A score around 620 to 679 is considered okay. A score of around 680 and 739 is considered almost ideal to lease a car.
Can I return a defective leased car?
There is often a legal contract between the leasing company and the borrower. If by some chance, the car leased to you turns out to be defective or faulty, you still have some options to return it and end your lease. Many states have lemon laws. These laws apply to the borrower’s car in this case. This only applies as long as the circumstances match the parameters of the law.