Why are more and more people leasing cars instead of buying?
First, what is car leasing all about?
Leasing is similar to ‘renting’ a car but for a longer period. It’s a three-way contract (between the leasing company, the borrower, and a financier who is usually the borrower’s employer) that stipulates the terms and conditions, including the maximum kilometres driven annually.
What are its advantages?
Many people are attracted to leasing instead of buying a car because it allows them to upgrade their vehicles every two or three years without being saddled with a depreciating asset and the responsibility to dispose of it. A lease also requires less upfront cash and lower monthly payments.
What are its disadvantages?
First, you cannot claim the leased car as your asset.
Second, the monthly car payments don't apply to ownership of the car, although there is an option to own the vehicle, depending on the car lease type you choose.
What are the types of car leases?
There are three basic types of car leases that you can choose from, namely operating, finance, and novated. All these types work on the premise that the leasing company (lessor) owns the car and you, the borrower (lessee), need to pay rent to use it for a specified term.
Under finance and novated leases, you may opt to pay the car’s residual value if you wish to buy it at the end of the lease period.
How do I go about leasing a car?
Notwithstanding the noted disadvantages, many people still think that a car lease works for their situation perfectly. Whatever lease type you choose, the first few steps involve talking to your employer about salary packaging, finding a car company or supplier, and choosing your car.
What are the cheapest cars to lease in Australia?
In this article, we’ve come up with the cheapest cars to lease across classes and body styles. These cars not only have the most affordable monthly payments, but they've also been the most sought by customers signing up for car leases. We’ve also made comparisons against more popular models (and more expensive, of course) in the same class for your appreciation.
5 Cheapest Cars for Lease
1. Micro/Mini or A/B-segment: Kia Picanto S
The KIA Picanto S is an eye-catching 5-door hatch available in both manual (5-speed) and automatic (4-speed) transmissions at a monthly fee of $600-$700 (all monetary values are in AUD). This range applies for a lease period of 3-5 years and annual KM of 10,000-15,000 (all distances are in kilometres). The Picanto is a multi-awarded car, including Which Car’s Best City Car in 2018. ANCAP gave it a 5-star safety rating with an overall score of 34.26 over 37.
Compare this lease price to a Mini Cooper Seven 1.5 Hatch, another looker on the block, which you can lease to the tune of $800-$990 per month. Higher spec levels fetch over a thousand dollars a month to lease. A longer lease term will allow you to enjoy a relatively cheaper monthly rental fee.
2. Small/Medium or C/D-segment: Hyundai i30 Go 2.0 GDi
The Hyundai i30 Go 2.0 GDi is a C-segment car and takes the spot as the cheapest car to lease in this combined class. Per the latest data from the FCAI (February 2020), the Hyundai i30 ranks as the 5th top-selling vehicle in the country. You can take it home for $750 a month. If you’re looking at the i30 Active with SmartSense 2.0 GDi Hatch, be prepared to dig deeper into your pocket for a monthly fee of at least $850. But what’s a hundred for the extra safety features that the SmartSense adds?
Another hatch from KIA, the Cerato S, is the i30’s closest contender in terms of price competitiveness and bestselling rank (it ranks 7th). It is available in both 6-speed auto and manual and leases for around $770/month.
3. Compact SUV or J-segment: Mitsubishi ASX ES
While the Mitsubishi ASX did not make it to the top 10 bestsellers as of the end of February 2020, it still hovers somewhere near rank 15. The ASX ES 2.0 auto MY2020 can be had for $800-$850, depending on the trim level. This sporty SUV received the top rating of 5 out of 5 for safety from ANCAP for all its variants. The current model features the latest in tech as well and colours of oak brown, red diamond, and sunshine orange.
Within the same class, you can up the ante with Mazda’s CX-5, which is Australia’s No. 6 bestselling car. The ballpark figure for leasing a CX-5 will be $900 for the Maxx 2.0 FWD to $1,200 for the Akera 2.2TD AWD trim level.
4. Medium/Large SUV or J-segment: Mitsubishi Outlander ES 2.4L 2WD
The Mitsubishi Outlander range showcases diversely-powered models, from the conventional petrol- and diesel-powered trims to the modern PHEVs (plug-in hybrid electric vehicles). On the lower end is the Outlander ES 2.0 petrol (2WD, 5-speed manual) at $870 a month, while its high-end sibling PHEV Exceed 2.0 (4WD, auto) fetches $1,200-$1,400 per month.
Slightly bigger and also available in hybrid version is Toyota Highlander, aka Toyota Kluger in Australia. It's not yet certain whether the Kluger’s hybrid version will be sold here, but the ICE-versions have been in the market since the turn of the century and are now in their fourth generation, enjoying high safety scores. The entry model (3.5L petrol, 2WD, auto) leases at $1200, while the range-topping Grande model (3.5L petrol, AWD, auto) dictates a whopping $1,600 monthly rate.
5. Pickup truck/Ute: Mitsubishi Triton GLX+
As the 9th best-selling vehicle in the country, the Mitsubishi Triton also happens to be one of the more affordable and most leased cars today. Now in its fifth generation, it’s as versatile as ever in its single- and double-cab body styles and trim levels (high-utility to comfort-oriented). Lease rates range reasonably from $1,000 for the GLX ADAS 2.4 DiD (2WD, auto) to $1,300 for the GLS Premium 2.4 DiD (4WD, auto). Manual versions are also available.
But what’s our list without the Australian favourite, the No. 1 bestselling vehicle Toyota Hilux? After giving birth to the 4Runner, the Hilux continues to roam Oz with no letup. Now in its 8th generation, it doubles as a robust off-roader and a well-mannered on-road vehicle. The entry model Hilux Workmate 2.4 TD (4WD, 6-speed manual) can be yours to use for as low as $1,100 per month, while the Hilux Rugged X 2.8 TD (4WD, 6-speed manual) requires at least $1,500.
So there you have it, the Five Cheapest Vehicles to Lease in Australia, plus a bonus on the comparison with top-selling models in the same class!
***Note: All lease amounts indicated include running costs and represent approximate figures.
Each mentioned model also links to a full-length article dedicated to it in our Carpedia section. It includes the car’s history, its full specs, and other important details that you may need in making a decision.
We hope you have found this article useful in your search for the best car for you and your family. For more articles about cars, auto parts sourcing, history, and the current issues in the industry, we invite you to visit Carpart.com.au.