Leasing vs Buying a Car




For sky-rocketing prices of vehicles, the question of leasing vs buying a car is valid now more than ever. On one side, none of us wants to spend lakhs of rupees upfront or in the form of down payment. On the other, we want to opt for an all-in-one lease subscription and somehow comfort ourselves with the idea of never actually ‘owning’ a car.

Although, thanks to an innovative world we are able to clearly weight out real-world differences between leasing vs buying with practical options of being able to do both. In the end, what matters is whether or not you’re happy with the steering wheel in your hand.

If you are buying a vehicle to form an emotional connection with your vehicle and would like to ‘own’ it from the get go, then you should blindly purchase your vehicle upfront or apply for a loan. If you are a practical person and would like to weigh financial advantages of the both, continue to read this blog.

What is leasing, actually?

When you apply for a lease, you are renting it for a certain period of time. Imagine as though you’re renting out a new house. You pay a rent to the landlord and directly move in with your family. In essence, that is what a lease is about. However, in a lease, you will have a fixed period of time after which, the company will retrieve the car from your possession. At the end of such a period, you can choose to extend the lease or purchase the vehicle with the current value.

And well, buying a car means that you pay off your loan and get to keep your car. Pretty straightforward.

Lease payments vs. Loan payments

A typical loan repayment is based upon:

  • Sale price of your car
  • Your bank
  • Amount of capital sought
  • Interest rate
  • Miscellaneous bank offers and/or terms and conditions
  • Number of months to repay sought amount
  • Taxes and fees

Whereas, a lease payment is dependent upon the following factors:

  • Sale price of your car
  • Expected mileage (For example, you are only allowed to drive up to certain thousand kilometers in one year)
  • Length of lease
  • Residual value (value of vehicle at the end of lease)

Note that monthly lease payments are comparatively lower than loan EMI because in a lease, you are paying for the practicality of being able to drive a car without any hassles and not towards the equity of your car itself.

Advantages of Leasing Vs. Purchasing A Car

There are several different advantages to leasing and buying cars that each motivating factor to outweigh one over the other. With purchase, you are stuck with the same car till such a time that you choose to sell it. With leasing on the other hand, you can always upgrade to a newer, much better car at the end of your lease period. You have to opportunity to experience new vehicles and newer technology that comes with it.

Additionally, with a lease, you are driving a car at the best of its condition which is also covered by manufacturer’s warranty. There are also no additional charges on repair or maintenance. Your leasing company takes care of that.



No upfront cost. No down payment.

Huge upfront cost/down payment.

Tax benefits.

 no tax benefits.

Maintenance and insurance included.

Extra charges for maintenance and insurance.

Allows you to upgrade vehicles.


No ownership.

Vehicle is registered as an asset. You can choose to sell it any time you like.

Not allowed to do modifications.

Can perform any modifications needed for your business.

 Cheaper for long term.

Expensive for long term.

No depreciation.

Depreciation begins soon after purchase.



Opportunity to own the vehicle at the end of lease term.



No restrictions/requirements whatsoever.


No such flexibility. You are stuck with your decision.

Lease Rental can be lower than loan.

Loan EMI can be higher than lease.



No reselling worries.

Reselling gets complicated.


However, if you ask us, we believe that there is always a better way to do things. This is what drives us towards our dreams and drives you towards the dream car of your choice. Leasing is a more innovative method of being able to drive a car. It is simply because none of us wants to be stuck in hassles of maintenance charges, road taxes and other recurring costs. Also, leasing provides you a direct tax benefit of up to 30% since you are not paying a single penny towards the dealership, government or towards the ownership of your car. Once you make clear financial research towards the ownership of your new car, you can calculate how much you’ll pay in each scenario over long term. No matter what you do, make plenty of research and understand the terms and conditions clearly. Make sure to be happy with whatever decision you take.

Lease is a straightforward option to reduce total cost of ownership over the contract duration.


Meet your new lease in town, leasemycars. Contact us on 91 -988 667 7386 or contact@leasemycars.in to get the best deal on your lease plan.


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