UAE: Why some motorists lease cars instead of buying them
Leasing vehicles is now one of the popular options for more and more people that need financial freedom and convenience. In fact, there is an increase in car leasing choices among the UAE residents according to industry sources.
It is mainly because for locals it is more feasible to get a car lease than a bank auto loan.
‘We have had more leasing the past few years,’ explained Boby John, who is a sales rep at Galadari Rent A Car. Our leasing terms extends from six months to three and four years so we have all kinds of clients and our leasing terms vary from six months to three and four years."
‘There are various reasons why people want to lease things like it’s convenient, not to worry about maintenance or ownership and not to pay an amount for them if they can’t get a loan,’ he stressed.
Kandy Cars Trading’s founder/CEO Ifthikar Aly added, the trend of car leasing is so rampant, "These days many individuals cannot even get a loan for buying a car because banks are increasing the minimum salary amount and the overall salary level is also dropping.’ For these people, it is now easier to lease a car. "For a lot of people, it’s just the best that they have," he said.
Leasing a car: You commit to paying a monthly amount to drive the vehicle throughout the term of the lease. You can return the vehicle to the dealer or buy the car at the end of the lease.
For others, the reason they did not buy but rather lease was because they had no guarantees. ‘We leased in our first year because we didn’t know if we were going to stay in the UAE,’ says Mariah Albert, a British expat. She wasn’t sure she wanted to stay in the area at first, but she liked the flexibility leasing brought.
Mariah talked about the decision three years later: I could attend to my business and my family instead of worrying about my car. "I can say with absolute certainty it’s been so good to return the keys any time since we are halfway between the UK and UAE. And I like having a new car every year, and it saves me a lot of money on repairs," she said.
Adding fuel to the fire, Omer Amin, a Sudanese expat who comes to UAE regularly for business, said his experience of leasing was excellent. "I have used leasing because it’s been the easiest way for me. I don’t have to pay a down payment like if I was buying.
Because he travels a lot, sometimes he needs a car but does not want to invest in one. "Another bonus is that I don’t have to worry about the value of the car. I just return the car at the end of the lease, not worried about whether it will sell for a good price." This economic plan works for him, and it works well for his lifestyle since he is working on a new car.
But not everyone is convinced that leasing is the best after seeing it. A Hindu expat named Fatima S was hesitant about leasing: "I had rented a car for one year and I was worried about the limit of mileage. I like to drive, and it was so constraining," she said. Lease contracts do have their constraints and that is an important disadvantage if you are a lover of travel.
Leasing sounded like the right choice at the time, for Fatima, who wasn’t in a good position financially and did not know her future. She bought her own car one year later: "I think for me, it makes more sense long term to buy a car.
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