This a question that many car owners grapple with as they set out to begin looking for a new car. You obviously want to get the best deal possible, within the budget that you have to work with. This is made easier given the range of options available today when it comes to getting into a new car, but it can be a bit mind boggling to decide what works best for you and your situation. To help ease the process, consider the following information designed to explain both the advantages and disadvantages of either buying or leasing a car.
Understand What Depreciation Means
Many people forget about depreciation when it comes to buying a new car. It is an important concept that vehicle owners need to be aware of. The value of any new car will dissipate rapidly in the moments after you begin to drive it. The more expensive the car, the more rapidly it will depreciate in value. This can amount to thousands of dollars in many cases in the moments just after you drive away from the dealership. If you plan to keep the car for many years, this will not impact you very much. However, if you decide to sell the car in just a few years, it can become disconcerting to find that the car may very well be worth less than the amount that you still owe the bank. If you lease a car, however, depreciation is not your issue. You are not the owner, so the dealership must bear the hidden cost.
Know How Much You Can Pay
If you are like most car buyers today, you have a set amount of money that you can comfortably spend each month on a car. That never seems to be quite enough to get you into the exact car that you want with all of the options that you desire. In order to make the numbers work, you typically must settle for a car that you might be happy, but not thrilled with. With a lease, you might very well find that you can move up a few car categories. This is because the monthly payments with a lease are typically much lower than if you were to purchase the car outright. As you go to consider your potions, this is something to keep in mind.
Know Your Driving Habits
It is important to remember that you do not own a leased car. In essence, the dealership is just allowing you to drive it for a few years. At the end of the term of the lease, you will need to turn it back in to the dealership. As a part of the agreement, you will receive a set number of miles that you are permitted during the term of the lease. If you go over this allowance, you will need to pay a flat rate per mile that you went in excess. This is not an issue if you do not plan on driving the car on numerous road trips every year. If that is the case, you might want to consider buying a car. You are then free to drive the vehicle as much as you want, but keep in mind that the value of the car will diminish as you put more and more miles on it.
Remember the Other Expenses Associated With Car Ownership
While buying a car outright has its advantages, it also comes with potential downsides as well. If you own a car, you also own the upkeep and maintenance as well. While this might not amount to much in the first few years, the more you drive the car, the more likely a major repair is to become necessary. When you lease a car, the vehicle is always relatively new until the end of the lease term. The chances of a major repair becoming necessary are very slim. In the event that something major were to happen, it would be covered under the dealership warranty and you would not need to pay for it.
This information should help you guide you to a decision that is in your best interest as you go to pick out your next new car.