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Buying vs. Leasing – Which One Is Right For You?

Cars play a huge role of daily life. Commuting to work, dropping off the kids at school and taking the spouse out for dinner are activities that are going to be affected by the state of your vehicle. If your automobile is starting to show its age, or you simply want an upgrade, there is a pretty good chance that stepping into a shiny new vehicle has crossed your mind a few times. Once you have determined your needs and picked out your dream car, the question stands: should you buy or should you lease this beautiful, new piece of machinery that is calling your name?

The answer to that question is…well, there is no definitive right or wrong answer. The answer on whether to purchase or lease your new vehicle depends wholly on what your needs and preferences are regarding your new car. These needs and preferences can change over time due to differences in family situation, job location, etc. Buying and leasing cars both have their benefits, along with their drawbacks.

If you’re prone to changing your mind a lot, easily getting bored with recent purchases and continuously lusting after the latest developments, leasing might be a good option for you. After all, this option enables you to climb into the newest model every year! Leasing a vehicle allows you to rent and use for an agreed-upon amount of time while making monthly payments. As long as it is maintained properly and kept within the pre-negotiated mileage restrictions, the automobile can be returned at the end of the lease with no fees. This option is good for people who have a need for business, as you may be able to write off a lease payment as a business expense. However, the major drawback to leasing is that after all of the payments you make, you will not own the vehicle.

This is an ideal scenario of those drivers who need transportation in the short-term but, perhaps due to frequently changing geography or simply life circumstances, are unsure whether they will need an automobile a few years down the line. If you’re someone who clocks in an abnormal amount of hours on the road, leasing may not be the way to go as many companies charge you if you exceed an annual mileage cap. If you are in a more permanent situation and are looking to enjoy the benefits of owning, it might be time to consider buying. When buying a set of wheels, you will most likely want to finance with an auto loan.  Interest rates can vary and can be dependent on your previous credit history but, even if your score is less than stellar there are companies like Auto Credit Express that specialize in bad credit auto loans. While monthly payments make this option similar to leasing, a major difference is that, after the loan is paid off, you have complete ownership of the vehicle. Also, if you buy a car, you have the ability to sell it using sites like Autotrader.com, or you can pass it down to a family member when it’s time to purchase another.  

Buying and leasing cars both have their pros and cons, and both of these options can be beneficial to you and your family depending on your situation. Whether you are looking for the newest model car every year, or finding a stable workhorse to last you and your family many years, the options are available and close at hand.

Money

AUTHOR Derek

My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

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