Under this scheme, car companies lease cars to customers for a fixed period of time. Customers pay a monthly fee in return. This amount is determined by the time limit and the model of the car.

Everyone dreams of owning a car, but many are unable to afford one due to budget constraints. There are also some who are fond of changing vehicles frequently. For such people, car companies are now offering a new option: car leasing. This facility is rapidly becoming a popular choice in India. People are increasingly leasing cars instead of buying them. So, let us explain what a car leasing scheme is and whether leasing a car or buying a new car is more beneficial.

What is this car leasing facility?

Actually, under this scheme, car companies lease cars to customers for a fixed period of time. The customer has to pay a monthly amount in exchange for this. This amount is determined by the time limit and the model of the vehicle. There's no down payment, but a security deposit is required. The company sets a limit for driving, exceeding which an additional charge is levied. The company covers the cost of vehicle maintenance, service, and insurance, saving the customer hassle-free time.

What are the advantages and disadvantages?

Many major car companies in India, such as Hyundai, Mercedes, Mahindra & Mahindra, Fiat, and Skoda, offer this facility. The biggest advantage of this scheme is that the customer doesn't have to pay a down payment, road tax, or maintenance. However, the biggest disadvantage is that despite paying monthly payments for a long period, the customer doesn't become the owner of the car and must return it to the company after the stipulated period is over. However, this scheme can be beneficial for those who frequently change vehicles or have transferable jobs. Such individuals can experience new cars without purchasing them. Under the car lease scheme, customers can lease a car for a period ranging from 12 months to 40 months. After the term is over, they can extend the plan or lease another car.

Whether Buying a Car or Leasing a Car?

If you plan to live and drive in the same city for a long time, buying a car is more beneficial. However, if you are in a city for only two to three years, leasing a car may be more appropriate. This can be explained in this way: if you buy a car worth ₹50 lakh, you will have to pay an EMI of approximately ₹1.19 lakh per month, which brings the total cost to approximately ₹60 lakh over three years. If you lease the car, you will have to pay a monthly rent of ₹1.3 lakh, and the total cost over three years will be approximately ₹37 lakh. After leasing the car, you will have to return it to the car company after the term is over.