There are many factors that need to be weighed out when deciding to either lease or buy a car. No matter where a person stands on this issue, they need to take into consideration the many pros and cons that lie on both sides of the argument. When asked, most people would likely tell you that buying a car is the way to go. They would be correct from a financial perspective, provided that they are willing to go the extra mile and make higher monthly payments. After a set length of time, they would pay off the loan in full and keep the car but for a few years until a newer one is needed. On the other hand, leasing a car can be a less expensive option. Paying a lower payment on a month-to-month basis frees up more money for the lessee compared to someone who is buying a car. Leasing a car is also good in the a sense for those who like to drive a new car every three years or so.
It is a true toss up question that has pros and cons on both sides. A buyer’s choice really comes down to their lifestyle choices, priorities and how you prefer to pay for things.
For those who like to have the newest and nicest things year in and year out, leasing is the way to go. Every two to three years, the lessee gets to pick out a new car to ride around in. Leasing is also great for those who are business owners. Leasing a car allows for lower maintenance cost because repairs are covered under the manufactured warranty. Along with a great warranty, you pay less sales tax. This leaves more money in the lessee’s pockets.
Unfortunately, there are a few cons that come along with leasing a car. One is that there is usually a yearly mileage limit put on the lessee. Typically, there is a 12,000 yearly mileage limit. Also, if you need to cancel your lease contract early, this could result in a costly fee.
If you are the kind of person who likes to stick with cars for years and get the most our of your money, then buying a car is the better choice. By buying a car, you would have a few years of not making a car payment once the car is paid off. Another pro to buying a car is that when you are ready to purchase a new car, you have a trade-in for the new car.
On the other hand, buying a car has its downsides. By taking this route, the buyer has to pay a higher down payment to avoid being upside down in the loan. Also, monthly car payments are higher when buying than when leasing. The buyer is responsible for any repair costs once the warranty expires, and this could be very expensive depending on the needed repair. Finally, a big downfall to owning a car is that your cash is tied up in something that only depreciates in value.
All in all, leasing a car is the easier way to go. By leasing a car, you are only paying for the use of the car for a few years instead of paying for a vehicle that only depreciates in value. Not to mention if any repairs are needed, it is up to the owner to cover the cost. On the other hand, if you are leasing the car, it is already covered under the factory warranty, and you pay no money out of your pocket.