Lease or Buy A Car

Buying a car today can be quite complex with so many car financing options available. Terms like hire purchase, novated lease, residuals and the like can be quite confusing to the uninitiated. It’s important that you understand what is being laid out in front of you, particularly if you’re trying to decide between buying or leasing.

Leasing a car means you are paying for the use of the car with you returning it at the end of the lease, or taking out another lease. With buying a car it is yours, you own it and you can do what you want with it.

Finance Lease

As they are a form of lease, finance leases require no deposit or trade-ins and only require the monthly payments which are based on the term of the lease, interest and the residual value of the car at the end of the term.

In this case you are the one taking the risk on the residual. If at the end of your lease term the market value of the car is less than what was predicted three years earlier, you are held responsible to make up the difference to finalise your contract.

Novated Lease

This is a popular way to include your car as part of your salary package to reduce your taxable income.

A Novated Lease is done by taking out a standard finance lease on a vehicle and arranging for the lease payments to be paid by your employer through a novation agreement. This agreement is only valid for as long as you stay with the company though. As soon as your employment ends the responsibility of any remaining lease payments then fall on you.

We're Here To Help

At Cars & Finance Direct we can help you decide what type of car finance is suitable for your needs. Give us a call today: 1800 13 55 12 or ask us a question about car loans via our contact form. We'll be happy to help you get into your new vehicle sooner.