Should I lease or buy a car?
Find out which option may be right for you and compare loans now.
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If you're looking to get a car, it can be difficult to choose between buying one outright or leasing. Both have a number of benefits and drawbacks, and it's important that you make the right financial decision for your situation.
See which one may suit your needs and learn your options below.
Leasing vs buying
Leasing a car gives you access to a vehicle for an agreed period, which can be for personal or business use, or a combination of the two. You will generally make regular payments over the course of the lease and may have the option to buy the car, or starting leasing a new vehicle, at the end of the lease term.
Buying a car involves you purchasing a vehicle so that you own the vehicle outright. You can either make your purchase using a car loan, which can be paid off in a period of up to seven years, or by buying the vehicle using your own savings. You are then free to use the vehicle as you wish, as well as sell it.
What financing options are available for cars?
- Secured personal loan. A personal loan that is secured works by you using the car as a guarantee in order to finance it. This is less of a risk for the lender as they can sell the car should you default on the loan. These loans generally have lower rates and fees and are offered as a fixed or variable rate option.
- Unsecured personal loan. An unsecured personal loan can not only be used to finance a vehicle, but can also be used for any other purchase you wish to make. These loans are flexible but they usually come with higher fees and rates because it is a risk to the lender.
- Dealer finance. If you purchase a car from a dealership then they will most likely have a financing option they are able to offer you. It's best to do your research before you sign up as dealer financing usually comes with inflated rates and high fees. Dealer finance usually comes with a balloon payment at the end that is designed to lower your ongoing repayments.
- Novated lease. A novated lease is basically a lease agreement between you, your employer and the lease provider. Some of your lease obligations are transferred to your employer and as such your car is treated like a company car for tax purposes. This type of lease can save you money by allowing you to access benefits such as GST discounts, income tax savings and savings on the cost of running the car.
Thinking of buying or leasing a car? Here are the pros and cons
Compare your leasing and car loan options
- No monthly fees
- No early repayment fees
- Borrow up to $75,000
100% confidential application
IMB New Car Loan
A low rate loan to finance new vehicles or cars up to two years old. Borrow up to $75,000.
- Interest rate: 4.99% p.a.
- Comparison rate: 5.34% p.a.
- Interest rate type: Fixed
- Application fee: $275.12
- Minimum loan amount: $2,000
- Maximum loan amount: $75,000
Frequently asked questions about leasing or buying a car
How often will you be driving the car?
Do you own a car now?
Will the car be for business or personal use?
Will you have to pay maintenance costs?
Whether you have to pay servicing or maintenance costs will depend on your lease agreement. These costs may be entirely included in your lease, you may have to cover some servicing costs (such as oil changes), or you may have to pay extra for a maintenance package.
What is your credit history like?
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Car Loan OffersImportant Information*
You'll receive a fixed rate of 4.99% p.a.
A low minimum borrowing amount of $2,000 that you can use to purchase a new car or one up to two years old.
You'll receive a fixed rate of 4.89% p.a.
Take advantage of a competitive rate, pre-approval and no early repayment fees when you finance a car under two years old.
You'll receive a fixed rate from 4.99% p.a.
A larger loan of $5,000 or more to help you buy a new or used car. 5-hour pre approval available and no ongoing fees.
You'll receive a fixed rate of 4.99% p.a.
Purchase a new or used car up to 2 years old and benefit from a fixed rate and no monthly fees. Pre-approval available within 5 business hours.
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