New Car Lease v/s Loan. Which is Better?

[pahujaamit]

So, as I'm going through the turbulent weather and rocky road of Documentation for the loan process, I realised that I have a Car Lease program from my company which is looking pretty lucrative, but I'm again too confused on whether to take loan or go for lease. The cash outflow in both is almost same 2500+/- on EMI or the lease option.

I need guidance here on what I should do? Which option is better?

As per my understanding as of now

Lease is better as

• No DownPayment - Big pluss
• No Maintenance
• No Insurance etc cost
• No hassles in case of any accident etc

Downside

• I dont own the vehicle even after paying rental for 36 months
• Have to pay huge sum of money to buy back after the tenure. I guess it will be 55% Residual Value.
• If I switch the jobs then its a cumbersome process and have to shell out lumpsum money to settle the lease or transfer it - HUGE drawback

Loan is better I guess as

• I own the car after the Loan tenure
• Little cheaper than lease option
• Monthly ouflow is little lower than Lease option

Downside

• Huge Lumpsum money to be paid in starting
• High Rate of Ineterst
• Loan process is painful
• To settle the loan before the tenure - shell out 6% or principal

So I'm not very sure which is good and bad as i see both of them have pro's and cons. would appreciate any guidance.

Thanks in Advance.
Amit

 

[dodge_v1per]

hey dude, loan option looks beneficial in your situation. whats benfit when your gonna pay almost same and car wont be on your name after term ends??

 

[harishankar]

The question is, do you want personal ownership of the car or you just want a car for the convenience on this job?

That should decide the question.

Of course, if you don't want to take a loan (because vehicle loans are getting more expensive by the day), you might want to consider a second hand vehicle which you can pay for with your own money straight up.