Pros Of Buying
Owning a car can be a good deal if you don’t want to get a new vehicle for a long time. You will also be able to drive as many miles as you want without having to pay any fees. However, the more miles you drive in your car, the less it will be worth when you go to trade it in anyway.
Cons Of Buying
One of the biggest downsides to buying a car is that you will need to put down a big down payment. On top of a large down payment, the monthly payments will be much higher compared to lease payments. Once your manufacturer’s warranty expires, you will need to pay for all maintenance and repairs yourself out of your own pocket. Most leases stay within the manufacturer’s warranty, so all repairs and maintenance are usually covered during the whole lease term.
Pros Of Leasing
There are many pros to leasing a car. Typically, you won’t have to come up with a down payment on a new lease. Monthly lease payments are much lower compared to the monthly payments for purchasing the same car. Another great benefit of leasing is that you will always have a new car every two to three years with all of the latest safety features and technology upgrades. Additionally, you won’t have worry about getting a good deal on trading in a car on a new one.
Cons Of Leasing
There aren’t too many cons of leasing beyond the fact that you won’t own the car once your lease ends. You usually have to agree to a set number of miles during your lease and can get fined for going over. However, if you know you will be driving more miles than allotted during your lease, you can try to negotiate with the dealership for more mileage.
Can I Use My Current Car As A Trade-In For A New Car Lease?
Usually, when people think of trading in their cars, it usually equates to purchasing a new car. However, there is the option to trade in the car you own for a new lease. Just the same way that a trade in can be used as a down payment for the purchase of a new or used car, it can also be used to put equity into a leased vehicle and thus lower your monthly payments. There are some things to keep in mind before deciding to use your vehicle as a trade in, though.
There are two things that need to be carefully considered before using your trade-in towards leasing a new vehicle. The first is that leasing is very different from renting a car. When you lease a car, the amount you pay is based on the value of the vehicle when you sign that lease. On the contract is included the estimated residual value of the car you want to lease during the whole lease term. The main factor that is taken into consideration when this is calculated is depreciation. Depreciation is what represents what the value of a new car might be worth at the end of the lease term, usually two or three years. Car renting, on the other hand, is just a short-term contract between the car company and the borrower. It is only a contract for a certain number of days or weeks.
The next thing to know about leasing a vehicle is that you never actually own it. There are two kinds of lease contracts to choose. The first is a closed-end lease and the second is an open-ended lease. The closed-end lease is where when the lease contract ends, the customer is free to return the car to the dealership, sign some paperwork and be done. The open-end lease involves facing a balloon payment when the lease is done. You will either need to make that balloon payment or finance the vehicle.