Is It Better to Lease or Buy a Car? - Slimmer Payments

Is It Better to Lease or Buy a Car?

Man Holding Car Keys

Buying another car means you are facing a lot of decisions. That includes getting a luxury, sports, or economy style, gas or hybrid, big or small, the color, and more. You also must choose between new or used, American- or foreign-made. One more decision that often enters the puzzle is if you should buy or lease a car. One option may be better than the other for you.

Advantages of Buying

Buying a car will give you some advantages over leasing. One thing that is apt to bring relief of mind when you buy is that you will feel glad that you own the car. You will not need to worry about paying more money when the lease is over.

Also, the car is still yours after you finish paying the loan. You will not need to rush to find another vehicle and you are free to trade it at any time. Buying the car will enable you to develop some equity in it, giving you something to use as a downpayment (trade-in value) when you sell it and get another vehicle. You also have the right to sell it at any time. When you lease a car, if you choose to end the lease early, it will likely cost you about as much as if you kept it the entire lease period.

Leasing a car means that you have a limitation on how much you can drive it, often set between 10,000 to 12,000 miles. If you go over that amount, you will pay an additional fee per mile driven above and beyond that limit. This means you will need to have a good idea about how much you plan on driving it during the lease period. You will not receive a rebate for fewer miles driven. Of course, if you own the car, you can drive it as much as you want.

Damage to the interior will not change what you owe to the bank if you own it. If your children in any way modify the interior – such as by spilling food or adding colors with markers or crayons, it will affect its value, but not what you owe to the bank.

Advantages of Leasing

A powerful advantage of leasing is that your payments will be lower than if you bought the vehicle. This can enable you to get a better vehicle than you might be able to afford if you bought it. You also have the option of getting shorter lease agreements than you can get with a bank loan for a car and it is not necessary to have considerable cash for a downpayment.

Along with the possibly better and newer model, you also have the benefit of reduced costs for repairs. If there is a warranty on the car, it will be even less. Most likely, with a newer car (less than three years old), you will be entitled to many free services – including scheduled maintenance. This is a powerful advantage because it will eliminate the potential surprise of large repair bills.

Also, you do not need to find buyers for the car when the lease ends. You just take it back to the dealer. You will have the option to buy the car at the end of the lease and the cost will be stated in the lease agreement when you lease the vehicle.

Obtaining a leased vehicle is similar to buying your own vehicle. Although there is a stated lease price, it should be considered a starting place for negotiation, enabling you to get a considerably lower price.

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