I have only once owned a car. Generally I lease my vehicles. For many years, the US company for which I worked paid for my lease car. Before that, however, I owned a large Saab and regretted every minute.
You’ve seen the film “The Money Pit”, starring Tom Hanks? His house was a money pit that devoured ever-increasing sums of money for renovation and maintenance. My Saab was the car version of his house.
The last straw in car ownership, for me, was the day I arrived to pick up my car after its brake pads had been replaced. This was many years ago and the garage demanded what was then the extortionate price of 800 dollars. I couldn’t pay it on the spot and had to walk home while the garage kept my Saab behind locked doors. Once I sold the Saab, I became a fan of car leasing. There are some particularly good leasing deals to be had during the recession.
Between 2004 and 2009, I leased Peugeots. The garage replaced my car every 2 years. Average monthly payments were 430 dollars. Insurance was an extra cost. Maintenance was included. So was breakdown assistance and a replacement car if my leased car needed repairing.
When the crisis bit in 2008, I looked for a cheaper deal. My local supermarket was offering Fiat Pandas for 215 dollars a month. Insurance was included. Was the deal really that cheap? I asked the manager and she said there were no strings, but it was necessary to lease the car for 2 years. At that price, I didn’t hesitate to sign the contract.
A neighbour of mine is a strong advocate of car ownership as opposed to car leasing. He told me that I was wasting money leasing a car. When we looked at the numbers together though, he was spending far more than I spend on my leased car. He bought his Peugeot four years ago for 18,000 dollars. He’ll sell it in a year. So, annually, he will have paid 3600 dollars. That’s 300 dollars a month compared to the 215 I’m paying. On top of that, he pays for repairs and maintenance. He also pays insurance separately. His insurance alone will add up to more than 4500 dollars over five years.
He was shocked to see that, as a car owner, he is paying almost twice what I pay for a leased car.
It’s true that my Fiat Panda is small. It suits my needs though – and is very economical on gas.
There are two main reasons why I’d recommend looking into car leasing deals as opposed to buying a new car. One is that costs can be low compared to owning a car. The other is that the cost of leasing is fixed each month, making budgeting easier. There is not the same liability that you get with car ownership. I have had one car accident and my cut-price insurance paid promptly and virtually without question. Since my lease car is under guarantee for the two years I’m leasing it, Fiat will pay for any technical problems and repairs.
The other day, my neighbour mentioned that his car has developed an ominous knocking noise under the hood. “I’m taking it to the garage” he said gloomily. “I bet it’ll to cost a fortune to fix.”
It’s that liability that I’m happy to avoid by leasing. My verdict on running a car is simple. Car leasing is for me. Car ownership isn’t. I’ll be renewing my lease at Christmas, opting for another new Fiat – which gives me affordable driving and peace of mind.