When it’s time for a new car, many buyers wonder whether they should buy or lease. It’s a loaded question with a personal answer. Unless you put thousands of miles a month on your vehicle, it’s almost always better to choose a lease. While both have pros and cons, the list of pros for leasing a new vehicle far outweigh the list of cons. Understanding how the lease process works makes it easier to determine if it’s the right choice for you. If you’re still unsure, perhaps a breakdown of what you gain from leasing is something you should see.
Peace of Mind
When you drive a lease, you drive a car that’s always covered under warranty. Dealers that lease cars are essentially lending you the vehicle. They get it back to sell when your lease is up, so they want to be sure the lease is cared for. This means your oil changes, maintenance, and any other issues are paid for under warranty to encourage you to continue with the maintenance.
Perhaps the biggest benefit of a leased vehicle is the lower payment. You pay very little more than the depreciation on the vehicle when it drives off the lot as you portion of the payments, and this means lower payments for a shorter term. It’s a great way to afford a vehicle that’s more expensive than you can afford otherwise. Many people choose to lease luxury vehicles so they can afford to drive them.
When you lease a vehicle, you get to choose how long you’d like to lease. Many people choose a two-year lease on average, which means you get to turn in your current lease for a brand-new car every time your term ends. Never driving an older car is a benefit many drivers appreciate, especially if they like to comfort of a brand-new car in their driveway every year or two.
Buying a new car is an expensive purchase. The moment you drive it off the lot, the vehicle depreciates significantly. Some vehicles hold their value better than others, but many people end up in what’s called and “Upside Down” situation. This means you owe more money on the loan you took out to pay for your car than the vehicle is worth. It’s difficult to trade it in and buy a new car when you owe more than it’s worth.
Buying vs. Leasing
There are pros and cons to both. The biggest con associated with leasing is the mileage. You must keep it below a certain mileage when you turn in your lease or you risk paying a specific amount for every mile you go over the limit. If you drive a lot, this can hurt. You can choose to increase the number of miles the dealer allows you to put on the car when you sign your lease. It increases your payment a bit, but it does allow drivers more freedom.
Leasing is a better option for more drivers because it’s the most affordable way to drive. It’s difficult to beat driving a new car every few years when you are able to trade it in before problems begin to occur. If you’re thinking of leasing, consider how may miles you drive before you make the decision. If it’s not much, this type of purchase is probably the right type of purchase for you.