What you need to know when upgrading your car while on lease?

Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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, updated on March 5th, 2021       

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Upgrade while in car lease

If you are in the car market looking for a finance option that allows you to upgrade your car you may want to consider leasing your car. There are some noteworthy benefits that come with it, but there are a few things to know to get the most out of leasing your car.

It can be beneficial when upgrading cars for business

Leasing a car for business purposes can be financially savvy in the sense that it can offer you lower payments and the ability to upgrade your vehicles every 2 or 3 years. Having a vehicle running at its optimum level can also ensure that you are not set back in carrying out your business activities.

There are scenarios where you may have started off with a vehicle that was more suitable for a tight budget, but your cash flow has improved. Therefore, an upgrade makes more sense to get a bigger and better car.

You can ease up your cash flow without hurting your ability to upgrade

One thing that makes leasing beneficial is that you can upgrade without having to pay more. When taking out a car lease agreement you will agree to a set amount on your monthly repayments which will remain the same despite making an upgrade.

There is also the fact that it can improve your cash flow. Lease agreements are known for having lower monthly payments when compared to buying a car outright. You also only foot fewer maintenance costs that can help ease up your cash flow to use more effectively elsewhere in your business.

Get access to a car with better technology and safety features

An upgrade gives you access to vehicles that have better features that you may have overlooked or that were not available when you took out your first car. Cars are constantly being improved by manufacturers with the latest safety features and technology that improve your driving. When it comes to business, you may be able to find vehicles that come with technology that allows you to have a hands-free conference call so that you don’t miss out on anything.

Other considerations

As much as leasing a car can come with a range of benefits there are a few pitfalls that need to be carefully considered. For example, leasing can give you less stress on depreciation costs and costs that come with covering distance travelled. However, you will find that most lease contracts have a cap on the distance you can travel. You may be charged for the exceeded kilometers you have travelled when you return the car.

Keep in mind to calculate the monthly repayment costs, interest, fees, and other charges that come with leasing to see if you can comfortably afford it. You may find that the longer the lease period is costly it becomes, which is another factor that you need to keep in mind.

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