Should I lease or should I buy my next car? Everyone has to answer this question at some point. Here are some of the pros and cons of leasing and buying and what you should consider when you’re choosing your next ride:
1. There are tax benefits to leasing
If you’re worried about paying Uncle Sam, you can find tax benefits if you lease. Buy a vehicle and you have to find a way to pay the sales tax on the total purchase price all at once. That can be hundreds or even thousands of dollars. When you lease, you only pay taxes on your monthly payments. This can really help you make ends meet.
2. Leasing offers predictable pricing
When you lease a vehicle, you know exactly what you’re going to pay for your car. When major repairs come up, it’s not your problem. The car stays under warranty, and you take it back for repairs on someone else’s dime.
When you choose to buy, it’s a gamble. You can buy your car on Monday only to find that it needs major repairs on Tuesday. When your car’s engine blows and you need $3,000 in fixes right away, the company that fixes your car is going to ask you how you want to pay the bill.
For people who like to know what they’re getting into, leasing takes the worry away. Know exactly what you’re going to pay each month. This is a great option for young people and for people who just like to balance their budget.
3. You keep up with the latest developments
Leasing a vehicle might actually be safer than buying. That’s because you have more opportunities to update your vehicle with each new lease. When you buy a car, you often feel pressured to keep the vehicle for as long as possible in order to get your money’s worth.
In fact, CNBC reports that most people hang on to their vehicle for more than a decade. If you choose the leasing option, you get a new vehicle every few years. This usually means that you’re in a newer model than you might be if you buy. Your vehicle is often safer and has more modern features if you have a later model.
4. You don’t have to take out a private loan
Buying a car requires paying for the entire car up front. Most people don’t have $15,000 lying around to spend on one item. That means you have to take out a loan for the rest. If you crunch the numbers, you’re often better off leasing. The rates and terms of leasing can put you ahead financially.
5. How often do you want a new car?
Some people just love having a new set of wheels. Other people prefer the comfort of their old vehicle. If you like having a new vehicle every few years, you’re going to do better financially if you go the leasing route. Frequent vehicle changes almost always weigh in favor of leasing.
Car lovers sometimes find that it’s fun to choose a new vehicle every few years. They can do their research and test out the latest models. If a vehicle is part of your personal identity or if you have the latest and greatest, leasing is going to be the best way to have it all.