Before you head out the door to begin looking for your next new car, you have an important decision to make. You will want to have some idea as to how you are going to pay for it. There are some great deals on leases today, so this is certainly a consideration. At the same time, a lease may not be for everyone, so buying a car might be more up your alley. With all of these decisions to make, it is helpful to have some information about each so that you can better know which option is best for you. Take a look at the following sections in order to be armed with the knowledge you need before signing any contract on the dotted line.
Consider the Value
You might think that the value of a new car is reflected in the price that you pay for it. This is not really the case. If you decide to buy a new car, it will be yours. That is an advantage to many people, as they can drive it however much they want and make any modifications that they please as well. At the same time, new cars depreciate faster than almost any other asset. This means that a $25,000 car is often worth thousands less the moment you drive away from the dealership. With a lease, however, you will not be concerned with depreciation as you never technically own the car in the first place.
Think About Your Driving Habits
You might not put much thought into how much you drive a car, but that is a consideration if you are thinking about a lease. In exchange for lower monthly payments, the dealership will ask you to limit the amount of miles that you drive each year. If you do not plan on taking a lot of road trips in this car, then a lease might be an option that appeals to you. You get a new car that will stay fresh looking for the duration of the lease, and you get to enjoy the lower payments at the same time. If you do plan on driving long distances in the car, however, then buying the vehicle outright might be put you in a better financial position in the long run. It really comes down to what your own individual needs are.
Type of Car
Everyone has a budget when it comes to buying a new car. If you find that the car of your dreams is just slightly out of reach, consider asking the dealership about lease options. With the lower payments, you might find that you can get the car you really want. The added benefit to this is that you can then turn it back in at the end of the lease, just about the time that the ‘newness’ begins to wear off. It is a way to stay in a perpetually new vehicle for less money in the long run.
Upkeep and Maintenance
While it is true that you own a car when you buy it, you also own the repairs that often come along with it. Do not count on your manufacturer’s warranty to cover everything, because eventually that will no longer be in the picture. If you choose to keep your for a long time, this is an expense that will need to be budgeted for. A leased car, however, is designed to stay like new for the duration of the lease. That is, after all, why you entered into the agreement in the first place. It is highly unlikely that a major repair will even become necessary. If it does, then you will actually be covered under the warranty, so there will be no need to worry about the repair.
As you can read, there is quite a bit to consider when making a decision between buying and leasing a car. You will want to weigh the pros and cons of each carefully as they apply to you before choosing one or the other. There are some very good reasons why leases are growing in popularity, so if that works for you it is definitely something you should consider.