By Veronique Harvey
Should you lease or buy your car? It is above all our needs that should guide this decision… but our finances too, of course! A few ways to see it more clearly.
Should you rent or buy your car?
Rent or buy your car? The question arises, but the ready-made answer does not exist. Each person should assess their needs and consider their budget before making such a large expense. Here are a few things to consider to guide your choice.
The automotive industry has not been spared by the pandemic. In 2022, the used car market has taken on a lot of value ( 34% increase since 2020 ). Why? Because the delays to get a new car are endless. We are talking about two years for certain models.
Repeated lockdowns in 2021 have slowed production lines around the world. The fault also lies with the shortage of microchips . They are essential in the engines and interiors of new cars.
Specialists predict a return to normal in 2024. Those who wish to acquire a new car will have to be patient.
What are my needs?
The fixed allowance is generally 12,000 to 24,000 km per year. However, some dealerships allow additional mileage to be “purchased” at a lower rate. An interesting option for those who know they will exceed this number.
But a calculation is necessary. With the additional premiums, the monthly lease payments could thus exceed those of the purchase.
Telecommuting is now more accessible and accepted. Many workers chose to leave the city. But the decision to settle in the suburbs or in the countryside often comes with the obligation to get a car. And beware, the further away you live, the faster the mileage accumulates. Once again, it is better to do the calculations before choosing the option to buy or rent.
Roger Lafrance is coordinator at ACEF Montérégie-Est. According to him, we must think of damage that exceeds normal wear and tear.
These will be invoiced to you at a high price at the dealership at the end of the contract. Otherwise, you will have to have them repaired yourself before returning the vehicle.
Some dealerships offer additional warranties against breakage and wear. The cost is added to your total bill. This aspect should therefore not be forgotten when calculating the monthly payment. Again, the monthly lease payments could end up exceeding those of the financing…
Renting is a good option if you know that you will have to change cars in the near future. For example, for the arrival of a new child. An automobile loses a lot of its market value in the first few years after its purchase. We are talking about a depreciation of 60% of its value after five years, including 30% in the first year. If you sell your vehicle quickly, you assume this depreciation. But conversely, the longer you keep your vehicle, the less this depreciation will have an impact.
What is my budget?
The monthly payment required for a rental is generally lower than the monthly payment required for a purchase. It is therefore interesting for small budgets .