Buy for $16 000
When you’re in the market for a car, you’ll need to figure out if you want to lease or buy your next vehicle.
The two options are very different, and there are quite a few factors that could sway your decision. While buying has always been the more popular choice, those who understand the benefits of leasing can see why it’s a strong option in its own right.
Why Leasing a Car Makes Sense
When you lease a car, you’re signing an agreement to make monthly payments for a car and then drive it for a preset period of time, with the standard length of a lease contract being three years. After your lease contract is up, you return the car to the dealer. Many lease contracts include the option to purchase the car at the end of your lease, and you’ll likely be able to do this whether your contract includes that provision or not. After all, dealers sell leased cars anyway as part of their certified pre-owned programs.
The great thing about leasing is that you can drive a new car for less money than it would cost to buy it outright. That’s because when you buy a car, you’re paying for the entire selling price of the car. However, when you lease a car, you’re only paying for the amount that the car depreciates while you’re driving it. Since this is a much lower amount, you end up with lower car payments and a lower down payment, if you even need to put money down.
The money you save leasing allows you to get the same car while paying less, or you can spend the same amount you originally planned and get a better car out of the arrangement.
If you want to drive the latest cars or you need a recent make and model for business, leasing is the way to go. You can get a new car every three years when your lease contract ends. If you were buying cars, you’d be spending much more money and dealing with the hassle of selling your used car or trading it in. Both of those are situations you never end up dealing with when you lease.
Another benefit of leasing is maintenance, or lack thereof. When you buy a car, the warranty runs out after a couple years and at that point, you’ll need to cover any major repairs out of pocket. Those major repairs also become more likely as the car gets older. When you lease a car, you only have it during the beginning of its lifespan, when it probably won’t need any major repairs. Even if it does, the warranty will cover it. All you’ll end up paying is basic maintenance costs.
Potential Drawbacks of Leasing
There are a couple things to be aware of before you lease a car. Lease contract have annual mileage limits. If you exceed the mileage limit in your contract, you’ll pay overage charges per mile, which can get expensive. Fortunately, the standard annual limit is 12,000 miles, and that’s more than enough for the typical driver. However, it’s something to keep in mind if you drive quite a bit.
You’ll also need to keep the car in good condition when you lease it, since you’ll be returning it to the dealer afterwards. Minor damage is covered as standard wear and tear, but anything significant you’ll need to fix yourself before you return it. Otherwise, the dealer will get it done, and the costs will likely be very high. You also can’t customize your leased car. While you technically could do this and then remove any customizations when you returned the car, it would end up being a waste of money.
Making Your Decision
If you want to have something of value for your monthly payments, then buying a car is the way to go. That comes with its fair share of hassles, though, and it’s worth looking at the lease options in your area to see how much money you could save and the type of car you could be driving.