Should you buy or lease your next vehicle?

October 15, 2014

Buying a Vehicle versus Leasing a Vehicle

When you’re looking for a new vehicle, one of the first decisions you’ll need to make is whether you’re going to buy or lease your car. There are benefits and disadvantages to both options.

Image courtesy of stockimages at FreeDigitalPhotos.net

Image courtesy of stockimages at FreeDigitalPhotos.net

Here are some tips that will help you make the decision.

Benefits to Leasing

One of the main benefits to leasing is that, at the end of the lease, you can hand the car back to the dealer and get a new vehicle on a new lease. Since leases are usually for a few years, you’ll almost always be driving a relatively new vehicle that is still covered under warranty. Leasing gives you added peace of mind and less hassle. You don’t have to worry about selling your car when you want to get a new one.

Another benefit to leasing is that, depending on your down payment, leasing a car can result in lower monthly payments. This is because you only need to pay back the amount that the car will depreciate over the term of the lease, not the entire purchase price of the car.

Benefits to Buying

One of the main benefits to buying is that, once you’ve paid off the vehicle, you own it. You can resell it yourself, continue driving it without making monthly payments or do whatever else you’d like with the car.

The fact that you own the vehicle provides other benefits as well. For example, you won’t have to worry about driving too much. Some lease agreements have mileage penalties, which mean that you’ll have to pay more if you drive more than the agreed-upon amount. In addition, most leases have wear and tear charges. This means that if you scratch, dent or cause any other damage to the car, you’ll have to pay more money.

One way to save money when buying a vehicle is to get a pre-owned (used) car. This way you can enjoy the benefits of owing a vehicle- but also keep money into your pocket.

What Should You Do?

Whether you lease or buy your next vehicle will greatly depend on your particular situation. In general, buying a vehicle is usually cheaper in the long run, but it depends on how long you plan on keeping the car. If you want to get a new car every few years, you will be better off leasing. If you’re fine with driving your car for a longer period of time, buying a car will save you more money the longer you own the vehicle.

If you need greater access to cash every month, leasing may be a better choice for you. This is because leases generally have low down payments and lower monthly payments than borrowing money to buy a car.

When it comes time to get a new vehicle, you’ll need to look at your particular situation carefully and make a choice based on the facts in front of you.

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