Making the decision to buy or lease a new or used car is a big step. It's probably one of the biggest purchases or agreements you'll enter into in your adult life. Just like buying a house vs. renting a house, there are several pros and cons to both sides. Sitting down and taking a look at some of the differences between buying and leasing should be the first step you take toward making your decision. Unlike buying a house, however, the value of a car will not increase after you purchase it, which is why the option of leasing a car is appealing to many people.
There are several things you may want to consider before making your decision to lease or buy a car.
Consider who will be traveling in the vehicle.
Will your new car be used solely by you, and perhaps a spouse or partner? Will this vehicle be used to traveling? If you have children or pets that will be frequently riding along with you in the vehicle, or if you have to travel a lot for work, or take family trips, leasing may not be your best option. With most leases come general wear and tear fees, so if there's a good chance that the interior of the car might encounter messes made by children or pets, or if the car might incur damage from the road, you might be better off purchasing your vehicle. These types of fees would depend on the lease agreement, of course,
What are you able to put down?
Most of the time, what you put down on a lease may be considerably less that what you might put down when purchasing a vehicle. With a lease agreement, you might even be able to get the down payment waived by the dealer, and may see smaller fees upfront. Don't forget about the fees that come along with the purchase of a new to you vehicle!
How much will you be driving the car?
It's a good idea to factor in how often you travel, or the amount of miles you'll typically be driving. If you already keep up with your monthly mileage, that should give you a good idea as to how many miles you rack up in a year's time. Many lease agreements may give the driver 10-15,000 miles, and any miles driven over that amount may have to be paid for per mile. You might be able to pay upfront for extra miles, and negotiate that into your lease, but if you do a lot of driving- say out of town for family travel, or business, leasing wouldn't be the best choice. In that case, you might want to consider purchasing a car that gets good gas mileage, and may even want to consider a manual transmission or hybrid vehicle if you do a lot of highway or interstate driving or commuting.
Consider you income and expenses.
Your monthly income plays a huge role in decision making when it comes to leasing versus purchasing a vehicle. If you have a steady income, but rely on a good chunk of it for monthly expenses, or are more prone to live paycheck to paycheck, leasing might be the better way to go. Lease and vehicle purchase terms are generally similar, but between a down payment, fees, and sometimes large monthly payment, purchasing a vehicle can become quite the expense, and can cost much more out of pocket up front. If you're interested in a smaller monthly payment, and smaller or possible even no fees upfront, leasing may be the better choice.
As with any major leasing or purchasing decision, it's best to consider both options from every possible angle. Ask a friend or family member who has leased a vehicle in the past what their experience was like, and weigh that against the experience of someone you know who has recently purchased a vehicle. You might even want to bring one of them along with you when you're vehicle shopping, for advice. Be sure to do your research before you get to the car lot or dealership, and remember that you can always take your time in making your decision, so you make the best decision possible for your situation.
Brought to you by Deery Brothers.