New cars are fun to drive, but shopping for one is never enjoyable. Car salesmen pushing cars at you every step you take, trying to convince you that you need specific things, and trying to talk you into spending more than you want to is no one’s idea of enjoyable. When the financial aspect of your purchase comes up, it’s not uncommon for salesmen to discuss buying or leasing. Many consumers are a little confused about the differences, which is why it’s imperative to learn what constitutes a lease vs. a buy prior to going into a dealership.
Buying and leasing are both equipped with pros and cons, but one choice is almost always better than the other. The biggest con associated with leasing a new vehicle is the mileage. You are limited to only putting a specific number of miles on your car each year unless you want to pay for additional miles at the end of your lease. For example, if you are allotted 12,000 miles per year for two years, you must return your with 24,000 miles or less or you pay a fee per mile. If you return the car with 30,000 miles on it and your lease statement requires you pay $.25 per mile for any mile over 24,000, you’re writing a check for $1,500 at lease end. Of course, this is only a problem if you drive a lot.
The biggest con associated with buying is the depreciation. Your car loses thousands of dollars in value the moment you leave the dealership with it, and that means you now owe more money than your car is worth. It’s difficult to trade it in or get yourself back into a positive financial situation with a car that’s depreciated this much.
Leasing is Cheaper Than Buying
When you lease, you pay only for the depreciation on a new vehicle. When the lease is up, you turn the car into the dealer. They then put the car back on the lot to sell, and they want to make a profit. You’ve already paid for the depreciation driving it for a year or two, so it’s easy for them to make a buck. It’s also less expensive for you to drive the car when it’s yours.
Leasing Allows You to Choose Between More Vehicles
When you buy a car, you have to keep it within budget. For many, this means driving a car that’s not very luxurious or very big. If you can only afford to buy a small sedan but you want a luxury SUV, perhaps leasing is the answer. You can lease a luxury SUV for a smaller monthly payment than you have buying a small sedan in many instances. Leasing lets you drive cars you can’t afford to buy.
Leasing Allows You To Drive A New Car All The Time
Driving a new car is fun, and driving a new car every year or two is even more fun. Leases allow you to turn your car into the dealer at a specific time, and you get to leave with a brand-new car in return. It’s easy, it’s stress-free, and you never drive an old car. It’s one of the biggest benefits leasing has to offer.
The list of pros is long, but the cons of leasing are minimal. Unless you’re putting tens of thousands of miles on your car each year, there isn’t a good reason not to lease a new vehicle. It’s safer, it’s more affordable, and it means getting a new car every few years.