Each year, millions of people face the challenging decision to buy or lease a car. Some will say that buying a car is the way to go. Others prefer leasing as a less-expensive option. Either choice and it is ultimately a financial consideration or a choice influenced by lifestyle. Before you make the decision, take the time to examine the pros and cons of each option.
Reasons to Lease a Vehicle
Leasing a vehicle has definite benefits for those who like the idea of driving a new vehicle every three years:
- People can generally count on lower monthly payments. Many people find deals with either low or no down payments. Money saved can be spent on other things.
- Quite often, a person can drive a better car for less money than if they financed their purchase.
- Since the leased vehicle will likely fall under a three-year factory warranty, there should be lower repair costs. Most warranties will cover at least three years.
- Transitioning to a new vehicle at the end of the lease is fairly easy. There are no trade-in hassles or worries if the individual has honored their lease.
Reasons Why Leasing May Not Be Right for You
While leasing has its benefits, there may be a few concerns for some:
- If a person prefers car ownership, they will not own the car at the end of their lease. However, industry experts advise consumers to check with the dealership to find out if there is an option to buy. Some people fall in love with their leased vehicle and want to hold on to it. After three years a vehicle can become quite familiar.
- If driving needs change during the lease, there may be a few challenges in terminating the lease. The dealership can explain all options.
The Benefits of Buying a Car
When buying a vehicle, there are no restrictions on personal modifications. Just be aware that any modifications or money spent is lost if the vehicle is repossessed for some reason. Vehicle owners may also tend to drive more since there are no mileage restrictions.
Reasons to Pass on Purchasing a Vehicle
Depending on credit, vehicle model and the dealership, there may be a higher down payment required when financing a vehicle. Vehicles can depreciate quickly, and a person can end up owning more than the vehicle is worth. Monthly car payments also tend to be higher than monthly lease payments.
Once the vehicle’s warranty expires, the vehicle owner is responsible for footing the bill on repairs and maintenance while still making payments. Overall, car buyers have more cash tied up in their vehicles compared to those who lease.
Getting More Car for Less Money
The truth is leasing a vehicle makes it a lot easier to get more car for less money. The reason being is that a person actually pays for the use of the vehicle as opposed to paying for the vehicle itself. Leasing, for many, is the way to go. It is easy to get used to the idea of driving a new vehicle every three years.
Those who lease also like the fact that a factory warranty will cover their vehicle for the duration of their lease. Most people also like their monthly payments to be as low as possible. Your dealership can provide additional information.