If you’re in the market for a new car, you may be wondering if you should lease a car or buy one. There are pros and cons to both choices that you will want to consider before signing the papers and driving off the lot.
If you are the type of person who likes having a new car every few years, then leasing a car would probably be the right decision for you. You won’t have to put all your money into the car upfront, and your monthly payment will likely be considerably less than if you buy a car. However, when your lease is up you will have to return the car and decide again whether to buy a new car or lease another one, unless you entered into a lease agreement that offers you the option of purchasing the vehicle at the end of the lease agreement. There also may be mileage limits when you lease a car, and if you go over the allowed mileage, you may have to pay some extra fees, which could get kind of expensive.
Leasing a car means you don’t own it and, therefore, can’t make any changes to it. If you wanted to put in a new stereo system, you’re out of luck and you have to deal with the one that’s in the car. If you wanted to install cool new exhaust pipes, sorry, you can’t do that either. If you buy a car, you can do whatever you want to it.
If you lease a car, it will generally remain under warranty for the duration of your lease, so any maintenance or repairs will be covered. However, if you buy a car, the warranty will expire at some point, whether it’s after so many years or once you’ve reached so many miles, and then you’re on your own to foot the bill for any repairs that need done.
If you decide you want to end your lease agreement early, there could be some hefty fines to pay and it may be difficult to get out of. If you bought your car and decide you don’t want it anymore, or you can’t afford the payments anymore, you have the option of selling it.
Buying a car means you will likely take a loss on it when you eventually sell it. Cars depreciate in value very quickly. So if you paid $25,000 for your car and four years down the road you want to sell it, you will have to sell it for much less depending on its condition. When you lease a car, you won’t find yourself out of thousands of dollars due to depreciation because you’re only paying for the car for the duration of your lease.
So, before you decide whether to buy or lease your next car, take into consideration the points above, as well as your financial situation, and what the car will be used for, meaning travel, business, pleasure, etc. Those factors will help you decide which option is the right option for you.