<\/span>How does leasing a car work?<\/span><\/h2>\nCar leasing allows you to drive a brand-new car for a specific length of time, usually between one and three years. Most Malaysian car leasing companies require you to pay an upfront fee before collecting the vehicle. Then, you pay a monthly fee over the duration of your lease.<\/p>\n
The monthly fees cover everything including the cost of leasing the car, road tax, insurance<\/a>, and maintenance. Over the lease period, you use the car just as you would any car you own but you may have a limit to how far you can drive a month, depending on the leasing option you chose. At the end of the lease period, you can either return the car and lease a new one, or purchase the car for the guaranteed future value (GFV) that should be defined in your lease contract.<\/p>\n<\/span>Pros & cons of leasing & buying a car<\/span><\/h2>\nWhen deciding if you should lease or buy a car, it\u2019s important to look at its pros and cons. Here are the main pros and cons of both options to help you decide.<\/p>\n
<\/span>Pros of leasing a car<\/span><\/h3>\n\n- Potentially lower overall cost:<\/b>\u00a0The monthly payments for leasing a car in Malaysia are higher than a typical car loan<\/a>. However, as the leasing fees cover everything including road tax, insurance, and maintenance, you can potentially save money. This is especially true, for instance, if you lease an expensive continental car and it requires major repairs.<\/li>\n<\/ul>\n
\n- Maintenance is taken care of:<\/b>\u00a0The leasing company is responsible for the scheduled maintenance of the vehicle during the lease duration. Therefore, you don\u2019t have to take the car to the workshop for servicing or repairs. Also, the warranty usually covers most of the cost.<\/li>\n<\/ul>\n
\n- Drive a new car every few years:<\/b>\u00a0After the lease is up, you have the option to purchase the car or return it and pick a new one to lease. If you enjoy driving a new ride with the latest technology, you can do so by leasing.<\/li>\n<\/ul>\n
\n- No resale worries:<\/b>\u00a0Since you can just return the car after the lease is up, you don\u2019t have to worry about selling it. You only have to pay any end-of-lease fees, including for abnormal wear and tear and excess mileage.<\/li>\n<\/ul>\n
\n- Cleaner credit score:<\/b>\u00a0By leasing a car, you won\u2019t have a car loan under your name and that means you\u2019ll have a cleaner credit score. This is great if you already have several debts to your name and plan to apply for a loan in the near future.<\/li>\n<\/ul>\n
\n- No long-term commitment:<\/b>\u00a0Leasing means you won\u2019t be tied down by a long-term loan. That makes it a better choice if you\u2019re an expat who\u2019ll only be in Malaysia for a few years or if you have future plans that will affect your ability to service a car loan.<\/li>\n<\/ul>\n
<\/span>Cons of leasing a car<\/span><\/h3>\n\n- You don\u2019t own the car:<\/b>\u00a0One of the biggest drawbacks of leasing a car is that you have to return it when the lease expires unless you choose to purchase it. If you decide to return it, you won\u2019t have an asset in your possession.<\/li>\n<\/ul>\n
\n- Never-ending monthly payments:\u00a0<\/b>If you decide to keep switching cars, you\u2019ll end up always paying to rent a car. At a certain point, you\u2019ll spend more on leasing a car than you would if you purchased one and kept it long-term.<\/li>\n<\/ul>\n
\n- Monthly mileage restrictions:<\/b>\u00a0Most car leasing companies have mileage restrictions on the car for the duration of the lease. However, they may also offer additional monthly mileage packages that you can pay for to get additional or unlimited miles on the car.<\/li>\n
- Wear and tear fees:\u00a0<\/b>When you return the car after the lease is up, you\u2019ll have to ensure that it\u2019s in good condition. Otherwise, you may be charged for excess wear and tear. You may also be charged additional fees for excess mileage and unapproved modifications, if any. If you decide to end the contract early, you might need to pay an early termination fee.<\/li>\n<\/ul>\n
<\/span>Pros of buying a car<\/span><\/h3>\n\n- You own the car:<\/b>\u00a0When you buy a car, you own it outright and it becomes an asset, albeit a depreciating one. You\u2019ll also form a long-term bond with your car \u2013 something you can\u2019t really do when you lease it. You can keep it for as long as you want and sell it at any time, or even give it to a family member. And if you do decide to sell it, you can still get some money back.<\/li>\n<\/ul>\n
\n- Lower monthly payments:<\/b>\u00a0Even if you take a five-year loan on your car, you would have lower monthly payments compared to if you leased it. This, of course, doesn\u2019t include servicing and paying for unexpected major repairs. However, most cars you buy are covered by a warranty, including CARSOME Certified cars, which have a\u00a0one-year warranty.<\/li>\n<\/ul>\n
\n- You have total control:<\/b>\u00a0Since you own the car, you can drive it as much as you want and modify it in any way you see fit, though keep in mind some modifications may void your warranty.<\/li>\n<\/ul>\n
\n- No special fees:\u00a0<\/b>Aside from unexpected repairs, there are no special fees when you buy a car. You won\u2019t be charged for excess mileage, additional wear and tear, or if you need to let go of the car early for any reason. Some used car dealers may charge additional fees but at CARSOME, we\u2019re always upfront and don\u2019t charge any\u00a0hidden fees.<\/li>\n<\/ul>\n
\n- Cheaper insurance:\u00a0<\/b>When you buy a car, the insurance goes down every year provided you don\u2019t claim from it. When you account for the reduced insured value of the car and the\u00a0no-claim discount (NCD)\u00a0on the insurance, you can save quite a bit on insurance the longer you own your car.<\/li>\n<\/ul>\n
<\/span>Cons of buying a car<\/span><\/h3>\n\n- Depreciation:<\/b>\u00a0New cars generally\u00a0depreciate<\/a>\u00a0between 15 to 35 percent after the first year. If you like to change your car every few years, this is a disadvantage. However, if you plan to keep your car for years, its depreciation shouldn\u2019t matter as its service to you will most likely make up for it. On the other hand, if you decide to buy a used car, it would\u2019ve already gone through the worst of its depreciation.<\/li>\n<\/ul>\n
\n- You need a bigger down payment:<\/b>\u00a0Purchasing a car requires a down payment typically amounting to 10 to 20 percent of the car\u2019s value. The upfront fee of leasing a car in Malaysia is usually significantly lower than that.<\/li>\n<\/ul>\n
\n- You\u2019re responsible for repairs:<\/b>\u00a0When you own a car, you\u2019re responsible for taking it for its\u00a0scheduled maintenance\u00a0and for any unexpected repairs. Outside of the warranty period, you\u2019ll have to bear the costs on your own.<\/li>\n<\/ul>\n
<\/span>Pros & cons of leasing & buying a car<\/span><\/h2>\nWhen deciding if you should lease or buy a car, it\u2019s important to look at its pros and cons. Here are the main pros and cons of both options to help you decide.<\/p>\n
<\/span>Pros of leasing a car<\/span><\/h3>\n\n- Potentially lower overall cost:<\/b>\u00a0The monthly payments for leasing a car in Malaysia are higher than a typical car loan<\/a>. However, as the leasing fees cover everything including road tax, insurance, and maintenance, you can potentially save money. This is especially true, for instance, if you lease an expensive continental car and it requires major repairs.<\/li>\n<\/ul>\n
\n- Maintenance is taken care of:<\/b>\u00a0The leasing company is responsible for the scheduled maintenance of the vehicle during the lease duration. Therefore, you don\u2019t have to take the car to the workshop for servicing or repairs. Also, the warranty usually covers most of the cost.<\/li>\n<\/ul>\n
\n- Drive a new car every few years:<\/b>\u00a0After the lease is up, you have the option to purchase the car or return it and pick a new one to lease. If you enjoy driving a new ride with the latest technology, you can do so by leasing.<\/li>\n<\/ul>\n
\n- No resale worries:<\/b>\u00a0Since you can just return the car after the lease is up, you don\u2019t have to worry about selling it. You only have to pay any end-of-lease fees, including for abnormal wear and tear and excess mileage.<\/li>\n<\/ul>\n
\n- Cleaner credit score:<\/b>\u00a0By leasing a car, you won\u2019t have a car loan under your name and that means you\u2019ll have a cleaner credit score. This is great if you already have several debts to your name and plan to apply for a loan in the near future.<\/li>\n<\/ul>\n
\n- No long-term commitment:<\/b>\u00a0Leasing means you won\u2019t be tied down by a long-term loan. That makes it a better choice if you\u2019re an expat who\u2019ll only be in Malaysia for a few years or if you have future plans that will affect your ability to service a car loan.<\/li>\n<\/ul>\n
<\/span>Cons of leasing a car<\/span><\/h3>\n\n- You don\u2019t own the car:<\/b>\u00a0One of the biggest drawbacks of leasing a car is that you have to return it when the lease expires unless you choose to purchase it. If you decide to return it, you won\u2019t have an asset in your possession.<\/li>\n<\/ul>\n
\n- Never-ending monthly payments:\u00a0<\/b>If you decide to keep switching cars, you\u2019ll end up always paying to rent a car. At a certain point, you\u2019ll spend more on leasing a car than you would if you purchased one and kept it long-term.<\/li>\n<\/ul>\n
\n- Monthly mileage restrictions:<\/b>\u00a0Most car leasing companies have mileage restrictions on the car for the duration of the lease. However, they may also offer additional monthly mileage packages that you can pay for to get additional or unlimited miles on the car.<\/li>\n
- Wear and tear fees:\u00a0<\/b>When you return the car after the lease is up, you\u2019ll have to ensure that it\u2019s in good condition. Otherwise, you may be charged for excess wear and tear. You may also be charged additional fees for excess mileage and unapproved modifications, if any. If you decide to end the contract early, you might need to pay an early termination fee.<\/li>\n<\/ul>\n
<\/span>Pros of buying a car<\/span><\/h3>\n\n- You own the car:<\/b>\u00a0When you buy a car, you own it outright and it becomes an asset, albeit a depreciating one. You\u2019ll also form a long-term bond with your car \u2013 something you can\u2019t really do when you lease it. You can keep it for as long as you want and sell it at any time, or even give it to a family member. And if you do decide to sell it, you can still get some money back.<\/li>\n<\/ul>\n
\n- Lower monthly payments:<\/b>\u00a0Even if you take a five-year loan on your car, you would have lower monthly payments compared to if you leased it. This, of course, doesn\u2019t include servicing and paying for unexpected major repairs. However, most cars you buy are covered by a warranty, including CARSOME Certified cars, which have a\u00a0one-year warranty.<\/li>\n<\/ul>\n
\n- You have total control:<\/b>\u00a0Since you own the car, you can drive it as much as you want and modify it in any way you see fit, though keep in mind some modifications may void your warranty.<\/li>\n<\/ul>\n
\n- No special fees:\u00a0<\/b>Aside from unexpected repairs, there are no special fees when you buy a car. You won\u2019t be charged for excess mileage, additional wear and tear, or if you need to let go of the car early for any reason. Some used car dealers may charge additional fees but at CARSOME, we\u2019re always upfront and don\u2019t charge any\u00a0hidden fees.<\/li>\n<\/ul>\n
\n- Cheaper insurance:\u00a0<\/b>When you buy a car, the insurance goes down every year provided you don\u2019t claim from it. When you account for the reduced insured value of the car and the\u00a0no-claim discount (NCD)\u00a0on the insurance, you can save quite a bit on insurance the longer you own your car.<\/li>\n<\/ul>\n
<\/span>Cons of buying a car<\/span><\/h3>\n\n- Depreciation:<\/b>\u00a0New cars generally\u00a0depreciate<\/a>\u00a0between 15 to 35 percent after the first year. If you like to change your car every few years, this is a disadvantage. However, if you plan to keep your car for years, its depreciation shouldn\u2019t matter as its service to you will most likely make up for it. On the other hand, if you decide to buy a used car, it would\u2019ve already gone through the worst of its depreciation.<\/li>\n<\/ul>\n
\n- You need a bigger down payment:<\/b>\u00a0Purchasing a car requires a down payment typically amounting to 10 to 20 percent of the car\u2019s value. The upfront fee of leasing a car in Malaysia is usually significantly lower than that.<\/li>\n<\/ul>\n
\n- You\u2019re responsible for repairs:<\/b>\u00a0When you own a car, you\u2019re responsible for taking it for its\u00a0scheduled maintenance\u00a0and for any unexpected repairs. Outside of the warranty period, you\u2019ll have to bear the costs on your own.<\/li>\n<\/ul>\n
- \n
- Potentially lower overall cost:<\/b>\u00a0The monthly payments for leasing a car in Malaysia are higher than a typical car loan<\/a>. However, as the leasing fees cover everything including road tax, insurance, and maintenance, you can potentially save money. This is especially true, for instance, if you lease an expensive continental car and it requires major repairs.<\/li>\n<\/ul>\n
- \n
- Maintenance is taken care of:<\/b>\u00a0The leasing company is responsible for the scheduled maintenance of the vehicle during the lease duration. Therefore, you don\u2019t have to take the car to the workshop for servicing or repairs. Also, the warranty usually covers most of the cost.<\/li>\n<\/ul>\n
- \n
- Drive a new car every few years:<\/b>\u00a0After the lease is up, you have the option to purchase the car or return it and pick a new one to lease. If you enjoy driving a new ride with the latest technology, you can do so by leasing.<\/li>\n<\/ul>\n
- \n
- No resale worries:<\/b>\u00a0Since you can just return the car after the lease is up, you don\u2019t have to worry about selling it. You only have to pay any end-of-lease fees, including for abnormal wear and tear and excess mileage.<\/li>\n<\/ul>\n
- \n
- Cleaner credit score:<\/b>\u00a0By leasing a car, you won\u2019t have a car loan under your name and that means you\u2019ll have a cleaner credit score. This is great if you already have several debts to your name and plan to apply for a loan in the near future.<\/li>\n<\/ul>\n
- \n
- No long-term commitment:<\/b>\u00a0Leasing means you won\u2019t be tied down by a long-term loan. That makes it a better choice if you\u2019re an expat who\u2019ll only be in Malaysia for a few years or if you have future plans that will affect your ability to service a car loan.<\/li>\n<\/ul>\n
<\/span>Cons of leasing a car<\/span><\/h3>\n
- \n
- You don\u2019t own the car:<\/b>\u00a0One of the biggest drawbacks of leasing a car is that you have to return it when the lease expires unless you choose to purchase it. If you decide to return it, you won\u2019t have an asset in your possession.<\/li>\n<\/ul>\n
- \n
- Never-ending monthly payments:\u00a0<\/b>If you decide to keep switching cars, you\u2019ll end up always paying to rent a car. At a certain point, you\u2019ll spend more on leasing a car than you would if you purchased one and kept it long-term.<\/li>\n<\/ul>\n
- \n
- Monthly mileage restrictions:<\/b>\u00a0Most car leasing companies have mileage restrictions on the car for the duration of the lease. However, they may also offer additional monthly mileage packages that you can pay for to get additional or unlimited miles on the car.<\/li>\n
- Wear and tear fees:\u00a0<\/b>When you return the car after the lease is up, you\u2019ll have to ensure that it\u2019s in good condition. Otherwise, you may be charged for excess wear and tear. You may also be charged additional fees for excess mileage and unapproved modifications, if any. If you decide to end the contract early, you might need to pay an early termination fee.<\/li>\n<\/ul>\n
<\/span>Pros of buying a car<\/span><\/h3>\n
- \n
- You own the car:<\/b>\u00a0When you buy a car, you own it outright and it becomes an asset, albeit a depreciating one. You\u2019ll also form a long-term bond with your car \u2013 something you can\u2019t really do when you lease it. You can keep it for as long as you want and sell it at any time, or even give it to a family member. And if you do decide to sell it, you can still get some money back.<\/li>\n<\/ul>\n
- \n
- Lower monthly payments:<\/b>\u00a0Even if you take a five-year loan on your car, you would have lower monthly payments compared to if you leased it. This, of course, doesn\u2019t include servicing and paying for unexpected major repairs. However, most cars you buy are covered by a warranty, including CARSOME Certified cars, which have a\u00a0one-year warranty.<\/li>\n<\/ul>\n
- \n
- You have total control:<\/b>\u00a0Since you own the car, you can drive it as much as you want and modify it in any way you see fit, though keep in mind some modifications may void your warranty.<\/li>\n<\/ul>\n
- \n
- No special fees:\u00a0<\/b>Aside from unexpected repairs, there are no special fees when you buy a car. You won\u2019t be charged for excess mileage, additional wear and tear, or if you need to let go of the car early for any reason. Some used car dealers may charge additional fees but at CARSOME, we\u2019re always upfront and don\u2019t charge any\u00a0hidden fees.<\/li>\n<\/ul>\n
- \n
- Cheaper insurance:\u00a0<\/b>When you buy a car, the insurance goes down every year provided you don\u2019t claim from it. When you account for the reduced insured value of the car and the\u00a0no-claim discount (NCD)\u00a0on the insurance, you can save quite a bit on insurance the longer you own your car.<\/li>\n<\/ul>\n
<\/span>Cons of buying a car<\/span><\/h3>\n
- \n
- Depreciation:<\/b>\u00a0New cars generally\u00a0depreciate<\/a>\u00a0between 15 to 35 percent after the first year. If you like to change your car every few years, this is a disadvantage. However, if you plan to keep your car for years, its depreciation shouldn\u2019t matter as its service to you will most likely make up for it. On the other hand, if you decide to buy a used car, it would\u2019ve already gone through the worst of its depreciation.<\/li>\n<\/ul>\n
- \n
- You need a bigger down payment:<\/b>\u00a0Purchasing a car requires a down payment typically amounting to 10 to 20 percent of the car\u2019s value. The upfront fee of leasing a car in Malaysia is usually significantly lower than that.<\/li>\n<\/ul>\n
- \n
- You\u2019re responsible for repairs:<\/b>\u00a0When you own a car, you\u2019re responsible for taking it for its\u00a0scheduled maintenance\u00a0and for any unexpected repairs. Outside of the warranty period, you\u2019ll have to bear the costs on your own.<\/li>\n<\/ul>\n
- You need a bigger down payment:<\/b>\u00a0Purchasing a car requires a down payment typically amounting to 10 to 20 percent of the car\u2019s value. The upfront fee of leasing a car in Malaysia is usually significantly lower than that.<\/li>\n<\/ul>\n
- Depreciation:<\/b>\u00a0New cars generally\u00a0depreciate<\/a>\u00a0between 15 to 35 percent after the first year. If you like to change your car every few years, this is a disadvantage. However, if you plan to keep your car for years, its depreciation shouldn\u2019t matter as its service to you will most likely make up for it. On the other hand, if you decide to buy a used car, it would\u2019ve already gone through the worst of its depreciation.<\/li>\n<\/ul>\n
- Cheaper insurance:\u00a0<\/b>When you buy a car, the insurance goes down every year provided you don\u2019t claim from it. When you account for the reduced insured value of the car and the\u00a0no-claim discount (NCD)\u00a0on the insurance, you can save quite a bit on insurance the longer you own your car.<\/li>\n<\/ul>\n
- No special fees:\u00a0<\/b>Aside from unexpected repairs, there are no special fees when you buy a car. You won\u2019t be charged for excess mileage, additional wear and tear, or if you need to let go of the car early for any reason. Some used car dealers may charge additional fees but at CARSOME, we\u2019re always upfront and don\u2019t charge any\u00a0hidden fees.<\/li>\n<\/ul>\n
- You have total control:<\/b>\u00a0Since you own the car, you can drive it as much as you want and modify it in any way you see fit, though keep in mind some modifications may void your warranty.<\/li>\n<\/ul>\n
- Lower monthly payments:<\/b>\u00a0Even if you take a five-year loan on your car, you would have lower monthly payments compared to if you leased it. This, of course, doesn\u2019t include servicing and paying for unexpected major repairs. However, most cars you buy are covered by a warranty, including CARSOME Certified cars, which have a\u00a0one-year warranty.<\/li>\n<\/ul>\n
- Wear and tear fees:\u00a0<\/b>When you return the car after the lease is up, you\u2019ll have to ensure that it\u2019s in good condition. Otherwise, you may be charged for excess wear and tear. You may also be charged additional fees for excess mileage and unapproved modifications, if any. If you decide to end the contract early, you might need to pay an early termination fee.<\/li>\n<\/ul>\n
- Monthly mileage restrictions:<\/b>\u00a0Most car leasing companies have mileage restrictions on the car for the duration of the lease. However, they may also offer additional monthly mileage packages that you can pay for to get additional or unlimited miles on the car.<\/li>\n
- Never-ending monthly payments:\u00a0<\/b>If you decide to keep switching cars, you\u2019ll end up always paying to rent a car. At a certain point, you\u2019ll spend more on leasing a car than you would if you purchased one and kept it long-term.<\/li>\n<\/ul>\n
- You don\u2019t own the car:<\/b>\u00a0One of the biggest drawbacks of leasing a car is that you have to return it when the lease expires unless you choose to purchase it. If you decide to return it, you won\u2019t have an asset in your possession.<\/li>\n<\/ul>\n
- No long-term commitment:<\/b>\u00a0Leasing means you won\u2019t be tied down by a long-term loan. That makes it a better choice if you\u2019re an expat who\u2019ll only be in Malaysia for a few years or if you have future plans that will affect your ability to service a car loan.<\/li>\n<\/ul>\n
- Cleaner credit score:<\/b>\u00a0By leasing a car, you won\u2019t have a car loan under your name and that means you\u2019ll have a cleaner credit score. This is great if you already have several debts to your name and plan to apply for a loan in the near future.<\/li>\n<\/ul>\n
- No resale worries:<\/b>\u00a0Since you can just return the car after the lease is up, you don\u2019t have to worry about selling it. You only have to pay any end-of-lease fees, including for abnormal wear and tear and excess mileage.<\/li>\n<\/ul>\n
- Drive a new car every few years:<\/b>\u00a0After the lease is up, you have the option to purchase the car or return it and pick a new one to lease. If you enjoy driving a new ride with the latest technology, you can do so by leasing.<\/li>\n<\/ul>\n
- Maintenance is taken care of:<\/b>\u00a0The leasing company is responsible for the scheduled maintenance of the vehicle during the lease duration. Therefore, you don\u2019t have to take the car to the workshop for servicing or repairs. Also, the warranty usually covers most of the cost.<\/li>\n<\/ul>\n
![\"\"](\"https:\/\/static.imoney.my\/articles\/wp-content\/uploads\/2023\/01\/02150329\/mark-chan-59GWUeizvu0-unsplash_1200x628.jpg\")
<\/a><\/p>\n\n