Buy Or Lease A Car? What Works Cheaper On Your Pocket

For many Indians, owning a car is still a big financial goal. But with leasing and car subscriptions now available, more people are asking: is it better to buy a car or lease one? The answer depends on your budget, usage, and how long you plan to keep the car.

Also Read: Buying a Car? Here’s Your Step-by-Step Guide to Getting the Best Car Loan Without the Stress | Republic World

Outright purchase

Buying is the traditional way of getting the product. You either pay the full amount or take a loan. With a loan, you'll need to make a down payment (usually 10–25%) and then pay monthly EMIs. Once the loan is paid off, the car is yours. You can use it for as long as you want or sell it later.

However, you also have to handle expenses like insurance, servicing, and repairs. A new car loses value over time—about 50% in five years—so resale value is another thing to consider. Buying is usually better if you plan to keep the car for five years or more and want full control and ownership.

Leasing options

Leasing is a newer option where you pay a fixed monthly fee to use a car, usually for two–four years. You don’t have to make a down payment or worry about insurance or maintenance—they’re often included in the monthly cost.

At the end of the lease, you return the car. There’s no resale value, but also no hassle. Some salaried employees can even save on tax if their company offers a car lease as part of their salary package.

Leasing suits people who want to avoid ownership troubles, live in cities, and like switching to newer cars often.

Which option is cheaper?

Let’s say you want a Rs 10 lakh car. Buying it on loan could cost you around Rs 12 lakh in total over 5 years, but you can sell the car later and recover some of that. Leasing the same car may cost you Rs 25,000 a month—about Rs 15 lakh in 5 years—with nothing to recover at the end. So while leasing is simpler, it usually costs more in the long run.

Final word

If you’re looking for long-term value and don’t mind the responsibility, buying is likely cheaper. But if you want flexibility, ease, and don’t mind paying a bit extra for convenience, leasing could be a good fit.