Leasing or New Car: Which is More Profitable
Reading time: 5 minutes
Key points:
- Leasing allows you to avoid large initial costs.
- Buying a car gives full ownership and freedom of choice.
- Leasing often includes hidden expenses, such as mileage penalties.
- Depreciation and taxes must be considered when purchasing.
- The choice depends on your financial capabilities and goals.
Buying a New Car: Pros and Cons
Cost and Flexibility Comparison
Practical Recommendations for the Israeli Market
Financial Aspects of Leasing
Leasing, or long-term rental with purchase option, involves regular payments without the need to pay the full cost of the car at once. In Israel, this option is particularly popular among small businesses, as lease payments are often considered expenses for tax purposes. However, for individuals, it’s important to consider hidden costs: insurance, maintenance, and possible mileage penalties. Additionally, at the end of the contract term, the car must either be returned or purchased at the residual value, which may be inflated. Before choosing leasing, calculate the total overpayment and compare it with the cost of purchasing on credit.
Buying a New Car: Pros and Cons
Purchasing a new car for the full price or on credit gives a sense of full ownership and freedom to use the vehicle without restrictions. The owner can choose their own service center, sell the car at any time, or pass it on as inheritance. However, in Israel, where new car prices are among the highest in the world, this option requires significant initial investment or long-term credit obligations. Additionally, the car quickly loses value – depreciation can reach 30% in the first two years. Also consider insurance, tax, and maintenance costs, which fall entirely on the owner.
Cost and Flexibility Comparison
To objectively assess which is more profitable – leasing or buying – create a detailed financial plan. Include all possible expenses: down payment, monthly payments, insurance, fuel, maintenance, and taxes. For leasing, consider mileage limitations and purchase conditions at the end of the term. For purchasing – projected depreciation and potential revenue from future sale. Leasing offers greater flexibility: you can change cars every few years, always drive a modern model with warranty. Buying provides stability and no long-term obligations to a leasing company.
Practical Recommendations for the Israeli Market
In the Israeli market, it’s important to consider local characteristics: high vehicle excise taxes, insurance requirements, and the availability of preferential leasing programs for certain citizen categories. Before signing a contract, carefully study reviews of leasing companies and cooperation terms. If you’re leaning toward purchasing, consider buying a car through verified platforms, such as the Auto section on the free classifieds website. Here you can not only find good deals but also post your own sale ad, which will be automatically translated into four languages, which is especially relevant in multilingual Israeli society.
How to Make the Right Choice
The final decision depends on your financial capabilities, lifestyle, and long-term plans. If you value flexibility, don’t want to deal with car sales, and prefer always driving a new car – leasing may be the optimal solution. If you’re ready for large initial costs, plan long-term ownership, and want to avoid overpayments – buying a new car will be more profitable. In any case, use all available tools to analyze market offers.
In summary, both leasing and buying a new car have their strengths and weaknesses. Leasing suits those who prefer minimal initial investment and regular vehicle updates, while buying is beneficial for long-term planning and desire to retain an asset. In the Israeli market conditions, it’s especially important to use modern digital platforms to compare options and find the best terms. Don’t forget that when posting ads on specialized sites like Hand to Hand, your text automatically becomes available in Hebrew, English, Russian, and Arabic – this significantly expands the circle of potential buyers or renters and helps conclude better deals in Israel’s multicultural environment.
Frequently Asked Questions
Question 1: What are the main advantages of leasing?
Leasing allows you to avoid large initial costs, offers new cars on a regular basis, and often includes all maintenance.
Question 2: What expenses should be considered when buying a car?
When buying, you need to consider depreciation, taxes, insurance, and maintenance costs.
Question 3: What to choose: leasing or buying?
The choice depends on your financial capabilities, lifestyle, and long-term goals. Leasing is suitable for flexibility, buying – for stability.