It can be confusing and overwhelming to purchase a new car—and figuring out all of the fine print between buying and leasing can be a headache. Take the stress out of the process by learning why leasing a car could be an efficient, money-saving option for you!
Recommendation #1: Do You Want to Own a Car?
This is the first question you need to ask yourself in the process of deciding whether to buy or lease a car. If car ownership is important to you — as it does become collateral and equity for loans — then leasing might not be for you, as you don’t own a leased car. Now, you always have the option to buy your leased car at the end of the contract — but before that, it is the property of the dealership. If you’re open to the possibilities, continue on.
Recommendation #2: Do You Have a Down Payment Saved?
When you finance a car, you will need to provide some kind of down payment at the dealership. This comes in a variety of ways: You could sell your current car and use that money for the down payment. You could trade in your car to the dealership, and they will assign a value to your current car. You could save a down payment over time. This will cost you thousands of dollars.
If you don’t have the money for a down payment, leasing might be a better option for you. That’s because dealerships do not require a down payment for a car lease. Instead, they will ask for a small security deposit and your first month’s payment. There also will be a few taxes and extra fees, but all in all, you’ll be paying less at the outset. Plus, you get a new car!
Recommendation #3: Do You Mind Car Repairs?
One of the headaches of car ownership is that if the car breaks down, it’s on you. Certainly this doesn’t usually happen when a car is new — and even if it does, your car probably will be under warranty. The real trouble comes several years into your loan. You are buying the car and it is yours. At some point your warranty runs out. You have to pay for the new breaks and tires. With a lease, the dealership handles everything. You don’t pay out-of-pocket costs because you don’t own the car. This makes having a car a dream, really.
Recommendation #4: Do You Drive Many Miles in a Year?
Most leases have limits on the number of miles you can put on the car. If you go over the limit, then you could pay extra fees. However, by and large, if you’re not running up your mileage more than the limit, then you should be fine. All you have to do at the end of the lease, is drive your car to the dealership and pick out a new car. It can be that simple!
Are You Ready to Lease Your New Car?
If you’ve gotten to the end of this guide, then you may be ready to contact your dealer about leasing options. You’ve got all the information you need to make a decision. Remember that’s not right or wrong to buy a car vs. lease it. It’s really about your lifestyle and your budget!