I have heard of governments and corporates advancing the argument that leasing vehicles would save money as compared to purchasing the same for the company's operations. It follows that the leasing companies would be responsible for fleet maintenance which is a recurrent expenditure and in the long run, save on expenses. Testimony to this are vehicles which lie idle in company junkyards. Whats your take on this?
Not where I live. Buying the car where I live is always cheaper than leasing, leasing interests are super high and you end up paying so much more than the car is actually worth. I had a leasing on my car with a purchase option in the end and lost sooooo much money. Never again!
Bearing in mind that leasing company vehicles instead of buying them outright is not exactly a new idea - but is in fact something that has actually been common business practice for the past decade or so Yes for businesses/organizations - considering that cars rarely go up in value and new cars depreciate very quickly and also that buying a fleet of company vehicles outright - requires locking up a huge amount of capital in fixed assets - that then generally land up becoming rapidly depreciating assets on the balance sheet - leasing company vehicles rather than buying them outright - is very definitely considered to be the more cost effective option - as well as the smarter one too. Simply because - apart from the obvious overall savings and of course the tax advantages - not only does it ensure that no business would be lost due to vehicles being off the road - as most company leasing deals cover general maintenance, breakdown recovery, accident repairs etc along with replacement vehicles during those times - but more importantly - allows for better use of business capital - as instead of it being locked up in depreciating assets - it can instead - be distributed in other areas of the business where it would be more productive. However for the average person leasing instead of buying outright isn't necessarily always the most cost effective option - as although there are a huge amount of great deals to choose from - it generally only works out more economical to lease rather buy - for those that regularly replace high end vehicles every year or who run more than one vehicle.
My take on leasing depends on the situation. If the car is to be driven by an executive, then leasing is more like it because you are free of maintenance. But when there is a driver who can help in checking on the car (bringing to the mechanic) then it would be cheaper to purchase instead of leasing. But for personal use, I guess it is always the purchase that is preferred because the car is yours and you can do whatever you want with it.
