Getting a new car is a major commitment and investment. When you are looking to get a new car, the two main options you will have will be to either lease or buy the car. While the common belief has been that buying a car is a better option, there are many advantages that come with leasing a car instead. Prior to getting a new car, it is important that you spend time considering all of the pros and cons that come with leasing versus buying a new car.
Lower Monthly Payments
When you choose to lease a new car, the main advantage is that you will have much lower monthly payments compared to if you bought the car. When you lease a car, you will only pay for the amount of the car that you use. In many cases, this ends up equaling about one third of the total car value. This is cost is then spread out over the course of the lease term. In many cases, the monthly lease payments are less than half of what they would have been if you were buy the car.
More Affordable Maintenance
Another financial advantage that comes with leasing is that you will have much more affordable maintenance costs. When you buy a car and own it for a period of time, you will eventually incur a lot of maintenance and repair costs. These costs often come after the car is more than 50,000 miles old. If you were leasing a car, you would end up turing the car back in well before this point. Furthermore, many standard lease agreements will provide you with a maintenance package that will provide you with free maintenance over the life of the lease term.
Always Drive a New Car
If you like to drive new cars, then leasing will always be a better option for you. When you buy a car, you will likely have to wait at least five years before you will be able to sell it or trade it in. If you were to sell before this point, you could have to come out of pocket to pay off the auto loan. When you choose to lease a new car, you will only have to commit yourself to the car for two or three years. This means that after the new lease period is over, you will be able to turn in the car for a brand new car. Furthermore, many dealerships will give you the ability to upgrade the lease early and turn in the car for a newer model.
Never Payment Free
While there are clear pros that come with leasing a car, there are a few cons as well. One of the main disadvantages that come with leasing a car is that you will never be fully free of a car payment if you continue to lease the cars forever. If you own a car, you will eventually own it outright and will be able to be free of car payments. While this would be a financial advantage, it is offset by the several year period in which you are missing out on lower monthly payments. Furthermore, once the car is paid off, it will likely have a lot more miles and will cost more to maintain.