It is a glorious day when you are ready to go out and pick up your new car. You have likely done much of the research online, and you know the exact make and model that you would like to bring home with you. Naturally, you want to take it for a test drive just to make sure, and then the reality hits you that you have some purchasing decisions to make as well. Today, you can either buy or lease a car. There are advantages to both that you will want to consider. While leasing comes with lower payments, buying does have it caveats as well. We have put together the following information to help educate you about the car buying decision and lead to the right choice for your particular situation.
Understand Your Mileage Limitations
If you are considering a lease, you will want to ask the dealership how many miles they will allow you to drive over the term of the contract. This is a bit different than buying the car with cash, as under that scenario you are free to drive as many miles as you want without having to worry about a possible penalty. If you do drive more than your lease contract allows for, you will need to a flat fee per mile that you exceeded the allowance. If you do not plan on driving the car hundreds of miles a week, a lease is still a great option thanks to the lower overall monthly payments. Just take into consideration your driving habits and then go from there.
Know Your Budget
Whenever you set out to make any major purchase in life, the budget is always a primary concern. Shopping for a new car is certainly no exception. This means that you might not be able to get the exact car that you want if it falls outside of your price range. This is where a lease can be to your advantage. With a lease, the monthly payments are often much lower because the dealership retains ownership of the car. This means that you can often get into the car of your dreams within your budget much more easily than you could if you were to buy a vehicle on your own.
The Notion of Depreciation is a Consideration as Well
If you are not aware of what depreciation is, now is the time to learn. If you were to buy a new car for, say, $22,500, that same car may only be worth $18,000 the very moment that you drive away from the dealership for the very first time. This might sound like false information, but it is certainly true. New cars depreciate quicker than almost any other type of purchase imaginable in modern society today. That is something to take into account, especially as you go to sell your car. With a lease, however, depreciation is not your concern. The dealership takes on that hidden cost. You simply make your lease payments each month and the car is yours to drive.
What About Repairs?
There will be upkeep and repairs to be made with nearly any car. If you buy a car on your own, this is your responsibility. Sure, you might have a manufacturer’s warranty for a few years, but eventually that will run out and you will be left with a car that needs to be fixed periodically. A lease, however, stays new. The chances of a repair even being necessary during the time that you have the car is already slim. If you were to need to take the car into the shop for some reason, it would be covered under the warranty. This is another way to save money on your vehicle.
This information has been provided in an effort to give you more information about the merits of leasing vs. buying a car. Decide what is best for your individual situation before you enter into any contract. For most people, a lease makes good financial sense. You get a new car every few years that is dependable and reliable, while your monthly payments stay low.