Buying vs. Leasing a Car - Is it Better to Purchase Your Automobile or Lease a Car?
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
