The Low Down: Should I Lease Or Buy A Car?
Should I lease or buy a car? Whichever your choice may be, buying or leasing a car has a lot of financial implications. You shouldn’t only consider the monetary aspect before you put your signature in agreement to a deal. If you choose to either buy or lease or a car, your lifestyle and personal taste also has a lot to say about your choice. Do you look forward to knowing the pros and cons that accompanies each side of the buy vs. lease argument? Just sit back and read on. This article will guide you on the core tips you need to know and understand, which will guide you through the question – should I lease or buy a car?
Should I Lease or Buy a Car?
Your preferences, budget, and goals are the core factors whether you should lease or buy your next or new car. Each option regarding whether to buy or lease a car has its own unique set of benefits, but the most important thing is having a personal assessment of which of these benefits suits you most.
“Before dashing out in search of your next or new car, taking out time to decide the financial implications, what terms fit best for you and what you stand to gain from such terms should be the factors that prompt your final decision.”
Advantages of Buying a Car
In case you finally made up your mind to own a car, here are five (5) core benefits of your decision:
You Have No Distance Restriction
If your lifestyle is driving a car to a longer distance as you wish, the best option will be to own it. Leasing a car confines you to a certain length of miles you can cover, and once you ignore such limit, better be ready to pay heavily.
You Can Accessorize to Your Taste
You possibly might love having a car well accessorized. A well-accessorized car is precisely one area you’ll benefit when you buy a car because leasing one compels you to maintain the car in the same condition as it was handed to you irrespective of how long you intend to keep it.
You’ll Pay Less on the Long-Run
Generally, monthly lease payments are cheaper compared to monthly car loan payments. Nevertheless, one can accrue equity for each loan payment which will pay off in the future once you decide to trade or sell it. So, with all these calculations to keep track of, it is best to buy a car and drive it for many years as you may wish. Buying merely is the cheapest way to own a car. However, don’t forget that the longer you drive your car, the lesser it will cost when you want to sell it off.
You are at Liberty to Sell It
Compared to a car lease where you are stuck in a fixed ownership time-frame, once you own a car, you can choose to sell it at any time. With this flexibility of possessing and selling your car, you can quickly pay off any record of your loan balance.
You Can Save on the Depreciation
Within the first few years of using a car, about 25-40% depreciation in its worth is bound to take place. So, what this implies is that, when you buy a car that is about 2-3 years old, you have the benefit of paying an amount that is a reflection of its current level of depreciation.
Advantages of Leasing a Car
Sure you want to tread this path? If yes, it is fine. Below are six (6) essential benefits of leasing a car:
You’ll Have Fewer Repair Payment (Conditional)
During your car leasing process, one term that must be spelled out is whether the car you are leasing is under a manufacturer warranty. If this is inclusive, be sure not to be handed a massive bill for repairs you possibly might not expect. Nevertheless, you are still accountable for paying the minimum amount for car insurance which is required by the state where you reside. Also, other regular maintenance and fixes are always on you.
You’ll never be “Upside-down.”
The duration for a fixed term of a car lease is between 1-4 years. During this period, your expected monthly payment is a function of the level of depreciation that is likely for the car within the period of your lease term (different model and brand of cars have different rates of depreciation). In this case, you are expected to pay only for any depreciation that must have occurred during the lease period, and you can never go ‘upside-down’ which is a typical situation in which most car owners face – owing more than their car’s worth.
No Loan Approval Required.
For you to gain approval for a car loan, you have to maintain a good credit record; else you’ll have to pay higher interest – that’s a typical requirement by lenders. Car leasing companies don’t operate on such strict terms since they can easily take back their car when you fail in meeting their lease terms or making payments.
Lower Monthly Charges
The cost of buying a car can never match comparison to leasing one. Most times, leasing a car doesn’t require you to pay for any upfront sales tax, and you have just a little or no down payment to make. Be that as it may, when returning a leased car, you may be presented with extra charges that may result from having unrepaired damages, exceeding the permitted mileage limit or even cutting short a lease term earlier than agreed
Access to the Newest Car Models
Yes! When you lease a new car probably on a yearly basis, you will be sure to have access to driving cars with more safety features, comfort, and the latest technological input. You don’t necessarily have to afford to buy one before you can ride in it.
Never Having to Sell a Vehicle.
At the expiration of a lease term (usually a closed-end), you can decide to process a new lease term for another car or better return the leased car. Better still, you may be presented with the option of buying the car at the expiration of a lease term for a price that has already been fixed. Remember, you stand to gain more where the car still worth more than the pre-set purchase price but the reverse will be the case when the vehicle is lesser in worth compared to the price. Such experiences are not the case when you are tired of using your car, because you have to get prospective buyers by yourself from whom you will have a fair-trade in the worth of your car.
How You Find the Best Lease Deals on Cars
Did you finally decide to lease a car after reading and understanding the benefits outlined above? Yes, I believe. Ok, here is what happens, the process involved in leasing or buying a car is very similar. In case you have been worried about how to start, there is entirely nothing to worry about because with the right idea of what you need, leasing a car is very easy to do.
“Frankly speaking, the process of buying a car vs. leasing one has some complications. However, the major difference is that the option of leasing a car is less complicated”.
Just follow these few and simple steps with some personal homework, and you’ll sure have a new car lease with a fabulous deal to walk away with.
- Know Your Exact Preferences: If you are a single young lad, you possibly won’t have a need for a car with multiple rows of backseat like a mother with kids and other luggage to carry along.
- Compare Car Features: After having precise preference that suits your need, have a look at similar models and compare features such as; safety accessories, mileage limit, and ratings.
- Head to the Dealership: With a list of some choices at hand, it is wise to go for a personal inquiry and possibly a test drive. Here is where you’ll have a feel of how your chosen car operate when on the road.
- Match the Options: Once you have test-driven a couple of your enlisted cars, it is time to strike out some based on your experience with them. After this, you can then streamline what is left based on cost.
- Be Smart on Final Purchase Price: It is time to talk money! So, bidding down the purchase price as much as you can must be your top priority. Reason being that your monthly payment will be determined by how much you settled with the dealer. When you are good with an agreed price, you can then tell the dealer that you only want to lease.
- Be Committed and Consistent: After putting your signature in agreement to the lease terms, always ensure you make prompt payment and be sure to live-out your lease length to avoid extra charges.
Differences Between Financing and Leasing a Car
What is the difference between financing and leasing? Such is one frequent question from car shoppers. These are two different ways to access a new car deal with an absolute difference in their outcome and terms.
“Financing a car involves taking out a car loan which will enable you to buy your car while leasing a car involves you paying an agreed amount which gives you the right to use a car for a specified length of time.”
Just put it this way; you own a car which you finance (financing enables you to buy one) while on the other hand, you are borrowing a car which you lease (leasing allows you to rent a car).
Evaluating the Pros and Cons of Leasing a Car
Do you desire a long-term cost saving over a used or new car? Then the best alternative for you is to buy one. If your plan is to save money on the long-run, especially when you have an excellent investment plan for it, the best way you can achieve this is through leasing a car, where you can drive it until the amount it will cost to repair it exceed its replacement cost.
Leasing a vehicle is similar to renting an apartment. With renting, you have the liberty of living in a beautiful apartment with a monthly payment you can comfortably afford, compared to a mortgage plan. Despite the comfort and convenience, you may enjoy there; it is only for a while because the apartment ultimately belongs to another person that you are just borrowing the space from.