Buy Vs. Lease: Which Is Best For You?
Choosing between buying a car and leasing is complicated. Both offer their own incentives and downsides. The purchase of a new car carries the weight of higher monthly payments, but you get to own it, while leasing a vehicle offers lower payments with the ability to drive around in a new expensive car, but your payments will never cease if you continue to lease.
To find out whether you should purchase or lease a car, here are a few pros and cons.
Upsides Of Leasing
If you’d rather swap out a new car every few years, then leasing is perfect for you. Upsides include lower monthly payments, you get to drive around in a late-model vehicle that is covered under the manufacturer’s new-car warranty, the lease could include free oil changes and other maintenance, you get to drive around in a vehicle that might be too costly to purchase outright, and you don’t have to worry about the car’s trade-in value.
Downsides Of Leasing
The downside of leasing are that you will continue to pay monthly payments if you continue to lease, contracts specify that you can only drive a certain amount of miles, which will initiate a mileage penalty if you exceed the mileage requirements, you have to properly maintain the vehicle or you’ll face wear-and-tear charges, and termination fees are costly if you have to end the lease for any reason.
Buying Or Leasing
Here are some major differences between buying and leasing:
Buying: You own the vehicle.
Leasing: You have to return the vehicle after a given time.
Buying: Loan payments are usually higher and can include interest, other finance charges, taxes, and fees.
Leasing: Lease payments are always lower than loan payments.
Buying: You can sell or trade in the vehicle at any time to help pay off the loan balance.
Leasing: Ending the lease early will ensure that you are hit with costly charges.
Buying: The vehicle will depreciate as soon as you leave the lot.
Leasing: The future value of your lease has no impact on you, but you have no equity in the vehicle.
Buying: You can drive the vehicle as often and for as long as you want without any worries.
Leasing: You must pay extra charges if you go over the allotted mileage that the lease states.