Leasing or Buying, What are the Differences?

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Leasing or Buying, What are the Differences?

Posted on by carbroker

In today’s day and age, we’re lucky: there are so many ways of going about securing a new ride. You’ve got a few different options available if it’s time for you to upgrade your wheels, and two of the most commonly compared methods of doing this are leasing and buying.

So, you understand the main difference between the two: with a lease, you essentially don’t own the vehicle, and with buying a car, you do own it. But what are the little juicy nuggets of information that you only find out when you delve deeper? In this post, we’ll explain!

Leasing

Car leases, also known as novated leases, are when you pay a monthly fee to use a vehicle. You don’t own the car; you’re leasing it over an extended period of time. Many car drivers love the flexibility that comes with novated leases, as they get to enjoy driving their car without paying the larger upfront cost that comes with buying a car. There are a couple of different types of car leases:

  • Operating lease
    An operating lease is more like a rental agreement – you pay a monthly fee to drive the vehicle, and hand it over when the lease ends.
  • Finance lease
    There are a few variations of finance lease. You can set a monthly lease payment and choose to pay a residual at the end of the lease in order to purchase the car outright; or you can choose to swap the car over and continue paying monthly payments.

Lowering your taxable income

As an employee, you can choose to receive your salary as a combination of cash and approved benefits. These benefits are either tax-free or taxed at concessional rates. Replacing some of your cash salary with benefits enables you to lower your taxable income to increase your overall after-tax pay.

Buying

Buying a vehicle is the more traditional method of driving your dream ride around. When you buy a vehicle, you either pay for it outright, or you get a car loan in which you pay a deposit and then pay monthly fees until it’s paid off.

If you’re using your vehicle for business purposes, you’re also able to reduce your payable tax by deducting some of the purchase price and running costs as a business expense.

Which is better?

The question everybody wants to know the answer to: which option is better?! There’s no universal answer to this, because everybody’s circumstances are different. For one person, buying might be better and for another person, leasing might be better. Either way, make sure you chat to the experts at Carbroker.com.au before pulling the trigger. They’ll use their connections with over 2,000 Aussie car dealerships to find you the best deal whether you’re wanting to buy or lease a vehicle. Get in touch with Carbroker.com.au and get into your dream car sooner.

Testimonials

Thanks for your help. Must admit I was very sceptical in dealing 'on line' with an unknown person/company. As a single woman I don't want the hassle of going backwards and forwards, playing one dealer off the other. I used the internet to get a measure of what's reasonable and then it's 'give me your best price' no second chance. Some people can't get their head around that but life's too short. I only want to deal with ethical people. I'm happy that a salesperson makes a profit but it has to be fair for both parties. Thanks and I'll be recommending your site to friends.

M.F., Brisbane

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M.F., Perth

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S.T., Sydney

I drove around in my old car most of today and decided that I really had enough of it. Your quoted price of $18,200 is at least $1,000 cheaper than any of the others; I have been to three different dealers and haggled all day long.

S.L., Brisbane

Thanks for the quote. I am kicking my self slightly. In the weekend I went to my local dealer to test drive the car and was offered exactly my spec with 1500km on the clock. 3 months old for $55K (the GMs car). I had to make a call on the spot because another chap was also looking at it. I thought this would be pretty hard to beat so i went for it. If i had waited i guess i would have an absolutely new car and with 12 months worth of rego not 9. We live and learn. Next time. Thanks and regards

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P.B., Sydney

Thankyou very much Carbroker.com.au for helping us to buy our new car. We are very happy with the process of buying a car through Carbroker.com.au. We usually have big arguments over haggling so it was a great relief to get CarBroker to do all the hard work to relieve the stress on us and our marriage. And we still got a great price!

N&M, Sydney

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