Many drivers wonder what leasing a car really involves. It can feel frustrating and stressful trying to figure out what you truly can afford and what makes sense for your budget. What are the advantages of leasing a car as opposed to buying one?
If you’re wondering this question, then read below to get quick tips that can help you make the decision today. Keep in mind, that at the heart of trying to decide whether you should buy or lease is the amount of money you can spare for a car, how long you plan to lease the car and your current driving lifestyle.
Intrigued? Read on!
PROS: Buying a Car
Drivers who are leaning toward buying a car should remember there are several great outcomes, most importantly perhaps being that you are adding an asset to your wealth portfolio that can be used as collateral in the future. Other pros:
- Owning a car allows you to use your property to apply for other loans. Plus, financing a car can build your credit.
- Over many years, purchasing a car can save you money because you will own the car outright (no more car payments)
- You can sell a car you own.
CONS: Buying a Car
With great attributes to consider, buying a car also has a downside. Here are a few:
- You are in charge of all repairs and maintenance of new parts.
- If you crash your car and total it, you will get a payout from your insurance company, but it probably will not be enough to buy another new car or to replace your current one.
- You many have a difficult time selling your car — as used car buyers can have high standards.
- You may have a higher monthly payment than if you leased a car.
- You’ll need to start saving for a down payment.
PROS: Leasing a Car
Leasing a car has many pros, of which most are about making it easier for you and saving you money:
- Lower money required upfront.
- In some cases, you can right-off your lease on your taxes, if you use your car for business purposes.
- Lower monthly payments, especially when you lease a car with a low price tag.
- Additional savings to your monthly payment when you select a car with a higher estimate for residual value percent, which is used to determine the car’s depreciation.
- Car dealership takes care of all of the maintenance of the car.
CONS: Leasing a Car
There are several cons to leasing a car, as follows:
- You don’t own the car. You are borrowing it for a certain amount of time.
- You can get charged fees if you go over the mileage limit set for the car.
- You could spend more money over a long period of time because you’ll continue paying a monthly fee but you’ll never actually own the car.
You Can Have a Car Today!
Those new car keys could be yours today by signing a lease. Remember these tips as you make your decision and read all of the fine print of your contract. Many leases have mileage limits—so you’ll want to make sure you don’t go over!