Anyone who goes car shopping will be faced with the option of leasing or buying their new dream car.
To a certain degree, there is no right or wrong answer between those two choices; it’s just a matter of matching your needs to your financial situation. In both cases, you’ll most likely need to put down a down payment. And unless you’re paying for your car in cash, if you’re buying you’ll need a car loan.
Often the decision to lease comes down to a question of money. If you want to get the lowest monthly payment possible, then leasing could be the option. When you lease a car, technically you are only covering the depreciation value of that car and the finance charges of the lease terms.
When you add that up, it will be lower than a monthly car loan payment.
However, you only be driving this car for a certain amount of time. Typically a lease is just two to three years in duration.
This means every two years you need to go through the entire car buying process all over again. Some people enjoy that prospect while others look upon that idea with great dread.
On the other hand, if you are buying the car you make those car payments for 3-to-4 years, but then you own the car after all the payments are made.
Another issue to consider is the maintenance costs. With a lease vehicle, these costs are minimized because you’ll only be driving the car for two years and should incur any major repair cars that are outside the warranty. Of course, when you turn that car in you will be responsible for paying for any damages to the car like things to the fender or scratches. You should also know that a leased car comes with a specific set of mileage if you go over those miles you have to pay additional charges.
Finally, a car you buy and pay off becomes an asset that you can capitalize on. It is also the perfect ride to pass down to your teen driver when you upgrade. What do you prefer? Leasing or Buying?