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New or used car leasing – which choice is better for your company?
A car is an integral part of many companies' operations. For entrepreneurs, who want to avoid a one-time large expense, leasing is often the most advantageous form of financing. However, before making a decision, it is worth considering whether leasing a new or used car would be a better solution. Both options have their advantages and disadvantages, which are worth considering in order to adapt the choice to the needs and possibilities of your companies.
Leasing a New Car – Advantages and Disadvantages
Advantages:
- Manufacturer warranty: New cars are covered by a full warranty, which eliminates the risk of repair costs in the first years of use.
- Modern technologies: New cars offer the latest technological solutions, which increase driving comfort and safety.
- Lower maintenance costs: For the first few years, operating costs are significantly lower, thanks to the better technical condition of the vehicle.
- Better leasing terms: Banks and leasing companies often offer more attractive financing conditions for new cars, such as lower interest rates or a longer leasing period.
Defects:
- Higher initial cost: Leasing a new car involves higher installments, which can be a burden on the company's budget.
- Faster depreciation: New cars depreciate most rapidly in the first few years of use, which affects the cost of purchase.
- Limited selection of brands in lower price segments: Not every business needs a luxury or modern car, which may make purchasing a new car unjustified.
Advantages:
- Lower price: Used cars are cheaper, which translates into lower leasing payments and a smaller down payment.
- Slower depreciation: Used cars have already seen the biggest depreciation in value, making them a more cost-effective choice in the long run.
- More choice within your budget: For the same amount of money that you would spend on a new car, you can find a used vehicle from a higher segment.
- Shorter leasing period: Used car leasing often has a shorter repayment period, which can be beneficial for companies planning to replace their fleet more quickly.
Defects:
- Risk of failure: Older cars can incur higher servicing and repair costs, especially after the warranty expires.
- Higher insurance costs: Used cars may require additional breakdown insurance, which increases operating costs.
- Limited financing options: Not all leasing companies offer attractive conditions for used cars, and some require that the vehicle be no older than a certain age (e.g. 5 years).
Car leasing
Used Car Leasing – Advantages and Disadvantages
Comparison of new and used car leasing
Criterion | New car | Used car |
Leasing cost | Higher | Lower |
Loss of value | Faster | Slower |
Service costs | Lower | Higher |
Warranty availability | Yes | Depends on the age of the vehicle |
Technologie | Modern | Limited |
Financing terms | Attractive | Limited |
When to choose a used car?
- When the company budget is limited and lower leasing installments are important.
- When the car is not a key element of the company's image and its use is short-term.
- If a company wants to avoid the greatest depreciation of a vehicle.
Choosing between a new or used car for lease depends on the company's needs, budget, and how long the vehicle is planned to be used. New cars offer greater comfort and safety, but are more expensive to lease. Used cars, on the other hand, can be more cost-effective, but they come with the risk of higher service costs.
Before making a decision, it is worth thoroughly analyzing the needs of your company and consulting a leasing advisor who will help you find the best solution. Leasing, regardless of the choice of a new or used car, is a great option for entrepreneurs who want to maintain financial liquidity and at the same time invest in the development of their business.
Sources:
Santander Leasing – Leasing guides.
Mfind.pl – Leasing comparisons for new and used cars.
PKO Leasing – Financing conditions for new and used vehicles.
Industry blogs: FleetMarket, Motofakty.
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[…] leasing: If the value of the car does not exceed PLN 150,000, leasing fees can be fully included in the costs of obtaining income. For vehicles with a higher […]