Your understanding is correct in that purchasing a car outright with your savings is generally the most cost-effective option, particularly for a depreciating asset like a car. This is due to the fact that if you take out a lease or loan, you will have to pay interest and fees, which can add up to a significant amount over the life of the loan or lease. Furthermore, if you use your savings to purchase the car, you will own it outright and will not have to worry about monthly payments or the possibility of defaulting on a loan or lease.
On the other hand, leasing or financing a car can be a good option for those who want to save money and spread out the cost of the car over time. If you take out a lease or loan, you can still benefit from the tax-saving aspect if you are eligible for interest deductions. In India, you may be able to claim tax deductions on car loan interest, but the exact rules and eligibility criteria vary depending on your individual circumstances.
If you're thinking about leasing or financing a car, I'd suggest researching the various options available to you, including the interest rates, fees, and terms associated with each. You should also consider your overall financial situation, including your income, expenses, and savings, to determine whether you can afford the monthly payments and whether it makes sense to incur additional debt. The decision to lease, finance, or pay cash for a car ultimately comes down to your personal preferences, financial goals, and circumstances.