You take your car in for repairs. The mechanic tells you that your car isn’t worth fixing. It’s time to get a new one.
That means, you have to make a major decision. Should you buy a vehicle outright, or should you lease? More Americans are leasing vehicles than ever before. When you’re trying to make the big decision of whether you should buy or lease your next vehicle, here are some things that you should consider:
Payments to lease are typically lower
You might assume that it costs the same to lease a vehicle as it costs to finance a purchase with a loan. In most cases, monthly payments are less if you go with the leasing option. That’s because when you lease a vehicle, you’re not financing the entire value of the car.
When you’re done with the car and you return it to the dealership, the vehicle still has some value. That means when you lease, you’re really only financing the depreciation of the vehicle. Unless you can afford to put a large amount down, lease payments are typically lower than purchase payments.
The hassle of selling a car
If you buy your vehicle, chances are, eventually you need to sell it. There’s a lot of hassle that goes with that, including vehicle titles and wondering if you’re working with an honest buyer. There are warranties, liability waivers, transfer taxes and all sorts of things to be aware of.
When you go with a lease, you don’t have that problem. When your lease is up, simply hand your vehicle back to the dealership and go pick out a new one. Not having to worry about trying to get fair value for your used vehicle can save you days worth of work and worry.
Leasing is a great way to get the transportation you need and build credit
If you’re trying to build credit and generate some savings, leasing can be a good option for you. When you lease, you only have to make a down payment and then pay per month. You don’t have to pay for the entire purchase price up front. This can be helpful because cars today are expensive.
When you’re not in the small minority of people who have thousands of dollars sitting around, leasing can be the smart way to get the vehicle that you need. With a lease, you know the exact monthly payment when you go to make a monthly budget. This can help you create an overall plan for financial success.
But watch your miles
Most leasing agreements have some kind of limitation on the number of miles that you drive. If you’re going to drive more than that, make sure that you pay for extra miles up front. When you go over your miles, you often have to pay extra. In most cases, people don’t drive enough that this is an issue. However, if you plan to spend a lot of time on the road, this is worth paying attention to when you choose your leasing plan.
How safe do you want your vehicle?
Today, manufacturers make vehicles safer than ever. They’re always looking for ways to improve their vehicle crash test ratings, and government regulations continue to demand safer and more efficient vehicles. That means that when you lease a vehicle, you’re likely getting a safety and performance upgrade. Take advantage of the latest and greatest technology when you choose to lease.