Lease not Buy

Everyone realize that cost of ownership of a car is probably as high as maintaining a white elephant. Not only there are regular EMIs to be paid but also weekly fueling bill, 6 monthly service workshop bills & annual insurance payments to be made apart from any additional accident or breakdown repairs. Why can’t I lease the cars rather than buy one and pay a single comprehensive payments…. eg: pay 5,000/- and drive as much as you want for a month all inclusive (except maybe gas/petrol/diesel)

Tesla’s electric cars come with a less than a $ per mile leasing and an unconditional 9 year warranty (even covering user error).

Xerox photo-copiers were available at pay per copy lease. Meaning that customer does not have to pay separately for hardware, refills, paper or repairs.

Even Rols Royce leases aircraft engines at thrust per hour, “pay per flying hour” model.

America sells state of the art defense installations to Canada at PSI (performance -based product support integrator) mode or optimised weapon system support (OWSS). NATO & UK procures arms at Through life customer support (TLCS) contracts.

So from most mundane to state of the art flight and military hardware is available on leasing then why not Cars? Earlier the argument was that people will switch off their odometer/speed gauge to hide the distance traveled, but now there are so many GPS based telematics & navigational tools that can be screwed to the car to make this difficult.

Today the manufacturer has to make many compromises to keep the initial cost low often at an expense of higher upkeep cost. Parking sensors & collision detectors are not very expensive yet most cars don’t have it. My Realtor used to say that installing double ceiling and insulation in the house would reduce the air-conditioning bill by half but nobody want to pay for installing it. Maybe a leasing model will help us get rid of this myopic view and help us make greener, more reliable and economical cars.

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