Should you lease or should you buy?
Should you lease a car or should you buy one? There are advantages and disadvantages to each. There is no right answer to this question. Instead, you should base your decision on your personality and your needs.
Leasing a Car: Pros and Cons
Leasing a car offers a number of benefits that some would find very appealing:
- Lower Up-Front Costs - When you lease a car, you don’t have nearly as many out-of-pocket expenses. There’s no large down payment to worry about and no upfront sales tax.
- Lower Monthly Bills - When you lease a car, you’ll often end up with lower monthly payments.
- New Cars - Lease terms vary, but typically you’ll lease a car for a few years at a time. Then, at the end of that lease term, you will be able to start a new lease on a new vehicle.
- Fewer Age-Related Maintenance Issues - Since you’re leasing a new car, you won’t have to deal with wear-and-tear that is associated with older vehicles or degraded car systems.
Leasing a car does have its drawbacks, however.
For one thing, when you lease a car you will never actually own it. In the same way that renting an apartment doesn’t allow you to own the property, any money you spend on a leased vehicle will never contribute towards ownership. In other words, as long as you continue to lease, you will always have a car payment to make.
Other major drawbacks include mileage restrictions, higher finance charges, limitations on vehicle customization, and early lease termination penalties. Again, the analogy of an apartment applies: since you are “renting” a car long term, you need to answer to the leasing company and stay within the rules of the lease.
Buying a Car: Pros and Cons
The major benefit to purchasing a car is the fact that you will actually own it someday. When you have finished making all the payments, it is yours, and you won’t have to make any more. In a sense, you will be building equity, so you can recoup some of your payments if you ever decide to sell the vehicle.
Other benefits to buying a car include:
- Lower Insurance Limits - Insurance companies are more forgiving to owners than they are to those who lease.
- No Mileage Restrictions - If you have long commutes or if you love to take long road trips, ownership may be the way to go. You don’t have to worry about paying for any miles above and beyond those stipulated in the lease.
- No Customization or Maintenance Restrictions - You are free to customize the car as you see fit, since it will belong to you once the lender is paid off. Also, since you don’t have to worry about returning the car in tip-top shape at the end of the lease, you can deal with maintenance as you see fit.
Of course, buying a car does have its own downsides.
As mentioned earlier, you usually have to deal with higher upfront costs, including sales tax and a large down payment. Also, if there is a possibility you would sell the car, you will have to consider how your make and model will depreciate over time.
The right financing, though, will make a car purchase much, much easier. If you have questions about buying or leasing a vehicle, we are here to help. Our sales staff is on call and ready to help you make the best decision for your situation.
To visit us in person at our lot in Clarksville, call us today at 479-754-3020.