Should you buy the car or should you lease the car? That is a question that has baffled car shoppers for many years. The truth of the matter is that there isn’t one standard rule of thumb for every car shopper on the market.
While there are pros and cons when it comes to buying versus leasing a car, there is no singular correct answer when it comes to making a claim of which is a better option. The best solution depends on your personal situation and your personal preferences.
Leasing
Pros
Some people enjoy leasing because it allows them to drive a brand new car during the best years of the car’s life. If you have a good credit history, there is a great chance you can lease a car without having to hand over a large sum of cash up front.
Leasing a new car is almost a guarantee that you will have low maintenance costs. Plus, leasing often comes with a three-year warranty. Overall, leasing is a great choice if you have a steady budget.
Cons
Leasing is not always the most financially sound solution – especially if all you are looking for is a solid means of transportation. At the end of the lease, typically you can either purchase the car or lease a new one. Studies show that if you decide to lease three new cars within a 10-year period, you will usually spend a much larger amount than if you were to simply purchase the automobile. That said, you will be driving new and low-maintenance vehicles, whereas with a bought car you will probably make some major repairs towards your seventh, eighth and ninth years.
Buying
Purchasing a vehicle can be expensive at the beginning because you will have to make a large down payment, take out a loan and pay interest rates. If your car then depreciates in value, you may have a hard time selling it in later years. Although at the end of the term, you will be the owner of the car – unlike the leasing option.
The bottom-line is that you should always look at the big picture before you buy or lease a car. The best choice should be compatible with you lifestyle and your budget.
Resources
leaseguide.com, https://www.leaseguide.com/lease03.htm
smartmoney.com, https://www.smartmoney.com/spending/autos/to-buy-or-to-lease-7868/
Image Credit
Flickr/emilio labrador
Flickr/cosmic_spanner
