What You Need To Know About Leasing A Car vs Buying One New
When you are ready to sell your old car and get a new one it seems like the best option is to buy one. However, there is always the possibility of leasing a car. There are a lot of pros and cons to each and one is not necessarily better than the other.
Buying or leasing a car is a big financial decision and shouldn’t be taken lightly. It should be weighed on both sides as there is no situation that is a one-size-fits-all. What works for one person may not be best for another.
In this article, we will go over how to know whether you should lease or buy that new car you have your eye on.
Benefits of leasing
When you go into a dealer like a Ford dealer in Waxahachie TX, you’ll be faced with a choice. You can see vehicles that interest you and have the option to lease them or buy them. Most of the time people are going to opt to buy as it seems to be the most logical thing to do.
There are a lot of advantages to leasing that could work in the favor of some people. One of the most obvious advantages is that you perpetually drive a new car. A lease usually lasts two or three years and then ends. At the end of the contract, there is the option to buy the car or to start a new contract with another brand new car.
When buying a new car, the warranty ends after about five years and the car has depreciated in value considerably. This is when mechanical issues generally arise. When leasing, just about everything besides oil changes and tire rotations are covered in the warranty. When getting a new car every few years you virtually never need to deal with a car in the shop or an unexpected expense.
That advantage doesn’t appeal to everybody. A new car every few years comes at a price. However, another advantage that many people appreciate is the low cost to get into a new car. Down payments for a lease are much lower than when you finance a new car. Not only that but the monthly payments are usually lower. This means that to get behind the wheel of an expensive new car costs less than buying the same one. In the beginning at least.
Leasing is also very attractive to those that only have a temporary need for a car. For instance, if work is going to take you to another country in two years’ time, then having a lease is ideal as there is no need to trade the car in or deal with trying to sell it.
Disadvantages of leasing
Of course, there are going to be some downsides to leasing. For starters, if you continually lease, you will always have a car payment to make. When buying at least there comes a time that the payments are done and it is owned outright.
That can happen with a lease, but it has to be bought out after you’ve already been paying for it. And it can be costly since most of the money wasn’t paid in the beginning.
Probably the biggest disadvantage to leasing a car is that there is a limitation on the miles. Going over the mileage incurs a penalty on every mile driven over the limit. This isn’t a problem for people using their cars on a limited basis but most people will go over the mileage.
Advantages of buying
Buying a car is very straightforward. If you’ve ever seen a lease contract, it is very complicated and unlike buying a car. Once you buy a car it is yours as long as the payments are being made.
This allows for a lot of freedom. There is no contract. If the payments get to be too much or you simply decide that you don’t like that car too much then it can be sold or traded in for a new one. You also don’t have to worry about the condition. Clearly, it is better to take care of a car, but if you get into a minor fender bender or back into a pole there is not going to be a penalty later on as would happen with a leased vehicle.
There are also no mileage penalties that need to be worried about. You would never go on a road trip in a leased car, for instance. But you have total freedom in a bought one. Once the car is paid off it is an opportunity to save money. There will be maintenance and repairs to make but the money that went towards the payments being gone will be a relief.
Disadvantages of buying
The biggest downside to buying is dealing with the costs that come from owning a car. Depreciation happens fast so it is a game to try to keep it in good condition and for as long as possible before it begins to cost too much.
After the warranty, there is a lot of money to be spent on routine repairs. Even when the car seems to be running fine, the timing belt has to be changed, tires changed and many other parts that are due to wear out at a certain point. It is a race against time as the car ages.
It takes a lot to make sure the car is in good running order by regularly doing maintenance. Besides the cost, it can also be time-consuming to take care of changing the oil regularly and getting it tuned up.
There is no right or wrong when it comes to the lease vs buy debate. There are many people who are aware of the disadvantages of leasing that are very happy in their leased car. And many people who bought could never be happy with the restrictions of a lease. It all depends on the situation as to which one is right. And it all comes down to understanding the differences.