Getting a new car is exciting especially if you are doing it for the first time. However, when it comes to choosing whether to buy or to lease, you may end up in a dilemma. The question is whether to buy a new car or to lease a car. Both can make sense at particular times depending on your situation. Both come with some benefits but after a closer look, leasing a car has more benefits over buying a car. Here are some of its benefits.
When it comes to acquiring property someone once said, “If it appreciates, buy it. If it depreciates, lease it”. Now when you get a new car, once you drive it off the driveway of the seller, it starts to lose its value immediately. That means, if you took a loan to buy your new car, you are required to pay a given amount every month. With the depreciation of a car, that means at some point in time you will be paying for something that is less worth than the money you are paying.
Buying a car is also more expensive. The monthly payments you make after buying a new car are higher than the amount paid on a lease. That means buying a car can squeeze your budget very well. Leasing a car, on the other hand, comes cheap. It gives you the opportunity to drive a car that you wouldn’t afford if you decided to buy it. The first deposit is also a small amount compared to buying a car.
Another huge advantage on leasing a car is that there are no strings attached. Leasing a car is a contract for a specific time. Let’s say you drive the car for that given time and you don’t like it anymore. You just take it back and walk away or lease a different one. No questions asked. This is impossible if you bought the car. You have to keep it because it is yours forever and if it bores you then you have to sell it for cheap or trade it in.
Leasing a car keeps your options open. If a new model comes up, you can exchange the old one and get the latest model. You are not tied to the car as it is the case with buying. Every couple of years you can bring the car back and ask for an upgrade. You also don’t have to worry about the trade-in at the end of the use of the car. You just take it back without a hassle.
If you lease and use a car for business purposes, then you are in for a treat. The IRS reduces the tax on your leased car if you use it for business. Tax on the depreciation and financial costs are deducted significantly depending on how you use the car. This can save you a lot of money. When buying a car, on the other hand, you have no tax deductibles. All the costs and loans for the new car don’t get any tax deductibles.
For people with a bad credit score, leasing I for you. Buying a new car with a bad credit is nearly impossible. All the processes you have to go through need you to show how you manage your finances. With the poor credit score, this can be a headache and you may never find anyone to sell you a car. But luckily, you can lease one. The leaser doesn’t care about your credit score. If you need a car, they can lease you one whenever you need it.
You also get to drive a more expensive car. The lease is cheaper and so you can be given a car that you cannot afford if you tried to buy it. You get all the luxury at a cheaper price.
The bottom line
If you are looking to get a new car and you also know you get bored by something very fast, you should consider leasing. Every couple of years you get to upgrade to a new car and you don’t have to worry about the car’s depreciation. So if you are looking to drive the luxury cars but on a tight budget, leasing is for you.