People are torn between choosing car lease vs car loan since car financing choices like car lease and car loans are now common ways to obtain a vehicle. The procedure of car lease in India is undoubtedly simpler, and since most of the leasing company typically offer ‘Operating lease’ as a product which includes maintenance of car, you can drive carefree without having to worry about it. On the other hand, unless the application is made online, the procedure of getting the best car loans in India is time-consuming. Additionally, with a car loan, you keep the vehicle when the loan term is up, whereas with a car lease, you must return it.
Here, we’ll talk about car loans and car leases as well as their advantages and disadvantages.
How does Car Lease in India work?
In essence, a car lease in India lets you use the vehicle of your choice for a set amount of time. A car lease company will give you a car while still maintaining full ownership of it in exchange for fixed monthly payments. The road tax, upkeep expenditures, and other ongoing expenses are not required of you. While some leasing businesses demand that you purchase auto insurance, others will cover the expense as part of the rental. Your eligibility will be determined, among other things, by your age and income. You must return the vehicle to the leasing company at the conclusion of the selected lease period. You must also pay the firm a sum of money before you can obtain possession of the vehicle.
How does Car Loan in India work?
Best car loans in India is a practical financial tool that enables instalment payments for the cost of your ideal vehicle. Your car will serve as the guarantee for the car loan. Therefore, if you default on your auto loan, the lender will seize ownership of the vehicle. The EMI you must pay toward the auto loan will depend on the bank’s chosen interest rate. Your income, credit score, age, and other factors will determine if you are eligible for a car loan.
Here are some key differences between car lease and car loan that you should read to understand them both.
- EMI
With car lease in India the EMI you pay for a car loan will only cover the cost of operating the vehicle plus other charges. But when it comes to best car loans in India, a portion of the vehicle’s price is made up of the EMI.
- Down Payment
While taking caes on lease you dont have make a down payment. But with most car loans in India, you have to make a down payment.
- Mileage Limit
The companies that offer car lease in India will mention a limit on the mileage and any extra consumption will be charged. However, there is no such limit on the mileage when it comes to best car loans in India.
- Ownership of the car
With car lease in India, you will be asked to pay a specific amount at the end of the tenure. This is in case you wish to acquire the car. But when it comes to car loans you dont have to pay anything at the end of the loan tenure.
- Tax benefit
You can avail a tax benefit of up to 30% if you are taking a car on lease. But even with best car loans in India, you are not offered any tax benefit!
Even though the overall cost of a car loan in India is higher, you should keep in mind that the amounts paid can be viewed as an investment as you will still own the automobile at the end of the repayment period. However, if you lease a car, your costs are lower, but you must return the vehicle when the agreed-upon time has passed. Consequently, you can pick automobile leasing if you want to transfer between cars and are not interested in investing in a single vehicle. However, those who want to acquire a car should apply for a car loan.
Check out Assetify website to know more about our Car Loan services and call us today to talk to our expert.