Buy or Lease a Car
From LoveToKnow Buy
The cars we drive are a big investment. No matter if we decide to purchase or lease, a good amount of cash is going to leave our pockets. So which is better? Let’s look at the pros and cons.
Purchasing
When you think about purchasing a vehicle, you should ask yourself a few questions. Think about how much traveling you do during the year, how frequently you like to change cars and how much money are you willing to spend per month (if any).
If you do a lot of traveling due to a long commute to work, to see friends and family a lot, etc., those miles add up. When you own a vehicle, this is not a problem. The car belongs to you and you can wear and tear it up as much as you like. This also goes for people who like to customize their vehicle.
Are you a trendy or status seeking person? Do you feel like you need to have the newest and latest thing all of the time? If so, then purchasing a vehicle may not be for you. A person who buys a car is usually someone who likes to keep the car for at least a few years. This person is someone is more concerned with getting from point A to point B. The car just has to be reliable and comfortable to ride in. It all boils down to preference.
How is your financial situation? With purchasing a vehicle, once all payments are completed (unless you buy it outright), this added financial burden ends. You just need to be concerned with vehicle maintenance. Many vehicles today are built to last for several years. By the time the vehicle wears down to where it becomes more expensive to maintain, you have saved money from monthly payments. When you think about it, isn’t there other stuff you rather spend your hard earned cash on then having to constantly make car payments all the time?
Leasing
There are a few things to consider when leasing a car? Think about how stable your financial situation is, the amount of driving you do during the year, and how frequently you like to change cars.
When you consider a lease, stability in you financial situation is important. Most of these contracts obligate you to pay a large balloon payment if you return a vehicle in early. This could make a troubled money problem worse. However, if you have a solid income, leasing a car is less of a concern.
Do you put a lot of miles on your car every year? If you have a long daily commute or travel great distances, leasing may not be for you. When you lease a car, the contract allows you to put a certain number of miles on the vehicle, or you will have to pay extra when you turn it in. This can add up to a large chunk of change if you are not careful. Some leasing options will allow you to add extra miles for an added fee. But this is not always available.
So what makes a lease attractive? People are drawn in by the lure of low payments. When you lease a vehicle, you are only paying the depreciating value of the car for the time you have it. This results in lower payments. The best cars to lease are the ones with a lower depreciative value. A little research online will help you figure this out. Another positive about leasing is that your vehicle is fully covered by warranty. What this means is that whenever you take your car in for normal maintenance (like a tune up) it is covered by the warranty. As a result, you will be spending less money on service for the vehicle. However, if you don’t take care of a leased vehicle, in the end you will have to pay extra money if there is excessive wear or damage to the car.
If you decide to lease a vehicle, always try to negotiate the best price. Even though you are not buying the vehicle, the lower the cost, the lower the payments will be. Don’t be fooled into thinking that just because you are leasing, there isn’t any need to haggle.
Buy or Lease? Which is best?
When you make this decision, it comes down to a few key factors- financial, annual driving miles and personal preference. If you buy a vehicle, you can customize it, drive as many miles as you want without penalty, and eventually you will have no car payments. In leasing a vehicle, you are simply borrowing a vehicle for a set amount of time, are limited to the number of miles you can drive without penalty, can possibly have lower payments, will always be driving a new vehicle under warranty, and will continually have car payments (as long as you continue leasing vehicles). Consider all of this information, and it will give you a good picture of your vehicle spending preferences. Good luck and happy driving!!
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