When searching for a car, one of the most important decisions is whether you will choose to lease or purchase the vehicle. Depending on your needs, wants, and lifestyle, you should make an informed decision as to which choice is the best economic and practical choice for you. Below are the pros and cons of leasing and buying to help point you in the right direction.
Naturally, by buying your car, you get the benefit of having equity in it, and recouping some of what you paid when it comes time to sell. Many people feel as though owning a car is an investment, rather than the feel of “renting” a car by leasing it. When you lease a car, however, you don’t suffer from the number one issue with owning a car – depreciation. A new car immediately experiences a sudden depreciation as soon as it is driven off the dealer lot. With a leased vehicle, you are not suffering a major dip in an investment. Another benefit of leasing is that you “tie up” less money. If you lease a car, you make your monthly payments for the length of your term, and that is the extent of your cost. When purchasing a car, most drivers make a down payment and then finance the rest, which results in a much larger amount of money being paid while owning the car.
Some drivers enjoy driving the same car for years. They don’t like choosing another car every few years, like they would have to do with a leased vehicle. If you like to keep your car for an extended period of time, then strongly consider buying. Many drivers lease their vehicle for two or three years, which is a rapid turnover rate when you think about it. On the other hand, some drivers cannot imagine being in the same vehicle for longer than a few years and can’t wait to jump into the latest make and model. If that is more your style, then leasing is a great option for you. With leasing, drivers get the benefit of hopping into a brand new car, every few years. But remember that with that luxury, come the need to return to the dealership and make selections, and a contract, all over again.
Some drivers find that leasing is simply out of the question if they drive an excessive number of miles for work, play, or any other reason. With a lease comes a limit on miles, which you can typically work with your dealer on. You can choose the number of miles you are permitted per year, but be warned – your lease payments will be higher per month with the greater number of miles you have selected and even more importantly, be prepared to pay for any mile overage when it comes time to turn in your vehicle. However, if you are still set on leasing and you’re a busy driver, keep in mind that you may be able to turn in your lease early and proceed to lease or purchase a new vehicle. Regardless, many drivers do not believe that the limitation on mileage is worth it for them or their families.