Have you asked yourself if leasing is better than buying a car? Most people would probably quickly answer that buying is always better, but, is that really the best option. Are you willing to make a higher payment and keep the car more than a few years? Leasing is a less expensive option that doesn’t have as many strings attached. If you like the feel of driving a new car every few years, then leasing may be the best option for you. There really isn’t a clear-cut answer. There are both pros and cons to each financing option. It really comes down to your lifestyle, budget, credit, and preferences.
Let’s assume that you must use the car for business. If you need to impress and entertain clients, leasing will allow you to have a much nicer automobile for less. It can also be a great tax write-off. Some people prefer to have the same car for many years. They use the “drive it till it falls apart” motto. As long as a car is reliable, some people get their money’s worth from them. If you are this kind of person, then leasing is not for you. The point of buying a car is to drive it long beyond the payoff point and enjoy many years payment free. Unfortunately, many cars have service issues once they are paid off, which is why so many think leasing is attractive.
How much of a car can you really afford? Leasing will give you a better vehicle for less money. Buying is a more expensive option because you pay the car’s depreciation. Every situation is different, so, here is the pros and cons of both buying and leasing. There are financial factors, lifestyle and need requirements, and other things you should consider.
•You can have a low monthly payment
•You will pay little or no money down
•Drive a better car for less money
•No repair costs because the car is under the manufacturer’s warranty period
•Drive a new car every few years
•No trade-in hassles – At the end of the lease, you walk away
•Pay less in sales tax
•Able to purchase the car at the end of the lease’s term
•You won’t own the car at the end of the lease, though you can buy it if you want.
•Mileage is limited to 10,000-12,000 per year, but you can purchase extra.
•Lease contracts are often filled with terminology that is unfamiliar
•Sometimes, you will pay more than you would if you just bought the car.
•Any excessive wear and tear will be charged to you at the end.
•Terminating early is very costly.
•You can make modifications to your car as you see fit.
•Over the long term, you will save money on buying a car
•There are no mileage requirements and you can drive as much as you want.
•You can buy, sell or trade the car whenever you want.
•You can use the car as a trade-in to help with your next car.
•The car is yours at the end of the loan’s term.
•If you don’t pay a higher down payment, you will probably be upside down on your loan. Owing more than what the car is worth is a big problem for many consumers.
•Monthly car payments are always higher than leasing payments.
•Any repair costs are your responsibility. The warranty always expired during your
ownership and requires you to pay for services.
•Trade-in or selling hassles can be a big problem, especially if the market shifts.
•Your car will have a great deal of your cash tied up in it, and it will continue to depreciate each year.
To simplify your decision, leasing is a great way to get an awesome car for less. You only pay for the use of the vehicle for the two or three-year term that you drive it. On the other hand, leasing does have a few restrictions. If mileage caps and excessive wear costs scare you, then buying might be better. For most people, leasing is a very attractive option.