If you are getting ready to head out to look at new cars, you will want to be armed with some information related to your purchasing options. You may think that buying a car is the only option really available to you, but it is time to also consider what a car lease can bring to the table. There are advantages and possible disadvantages to both depending on your situation and what you need out of the vehicle. What you will want to do is consider the information below and then decide for yourself whether you should look into leasing or buying your next new car.
Residual Value vs. Depreciation
These are two terms that you will want to understand. When you go to buy a new car on your own, depreciation is a sad reality of life. Your new car will lose considerable value just minutes after you pay for it. This is can be rather disconcerting to many car buyers, particularly when it comes time to sell the vehicle. On the other hand, you will not need to worry about depreciation with a car lease. Instead, there is the residual value of the car at the end of the lease that you will want to look at. The higher the value the car at the end of the term, the lower your monthly payments will be. This is because the dealership knows that it will be able to resale the car for a higher price once you turn it back into them at the end of the lease.
Personal Ownership vs. Dealer Ownership?
How important is actual ownership over your vehicle? This is an important question to consider, as a lease will not give you ownership at all. The dealership retains the title and simply gives you permission to drive the car for a set term, usually around three years. If you buy a car, however, you become the owner as soon as you drive away from the dealership. You will be free to go wherever you want and make any modifications that you desire. If you finance the car, keep in mind that you still need to keep the payments current in order to avoid the vehicle being repossessed. The trade off with a lease is that you will enjoy lower monthly payments and not have to worry about selling the car.
Speaking of Selling Your Car…
At some point, nearly car owner reaches the point where he or she would like to sell the car. If you own the vehicle, this might not be as easy you would think. You will have to take into consideration how much you still own for the car. If it is more than someone is willing to pay, you will either have to pay the bank the difference or just keep the car and wait until another buyer comes along. People just do not want to pay too much for a used car, so you will have trouble finding someone that you will give you what you want in many cases. If you lease a car, you will not have to worry about selling the car at all. This is certainly an advantage in that there is a lot less hassle involved in the process.
Repairs Can Be Costly
Unless you are a mechanic yourself, you will need to depend on an auto repair shop to fix your car when something goes wrong. Outside of a warranty period, this will be an expense coming out of your own pocket if you buy the car. When you lease a car, this is not really something to worry about. The car will remain new for the term of the lease, limiting the likelihood that you will even encounter the need for a repair. If you find that your car does break down for some reason, it will be covered under warranty, so you will not incur an expense anyway.
These guidelines will hopefully help you as you being the car buying process. Enjoy the experience and get the car that you really want. In the end, buying or leasing is a personal decision where you need to weigh all factors before making a firm commitment.