Buying vs. Leasing a Vehicle
Should you lease or buy your vehicle? It’s an excellent question when looking to get a new vehicle. That being said, How do you know which option is better, and which option is the right fit for you? Turns out there are several reasons why leasing or purchasing is a good option. Take a look at the ins and outs of leasing vs buying a vehicle to help you make an informed decision.
Leasing a Vehicle
When you lease a vehicle, you’re basically renting or borrowing it and making payments on it until you decide whether or not you want to buy it. Depending on your financial situation, this structure could work to your benefit or harm.
Pros of Leasing
- Lower monthly payments: When leasing a vehicle, you’re paying for the depreciation costs instead of the fullprice of the car. This is called the “residual costs” of leasing a car, and it usually leads to lower monthly payments as opposed to the financing with buying a new car. This can be beneficial if leasing a more expensive car like an INFINITI.
- Drive new car models: Not many people are able to drive brand new vehicles right off the lot.. With leasing, you get to change it up with a new car every few years and enjoy brand new vehicles all the time..
- Usually fewer fees when the lease is finished: Don’t worry about resale value when you’re finished leasing your vehicle. Instead, you can turn it in at the end of your leasing period, buy it and keep it, or resell it.
Cons of Leasing
- Additional fees may apply: There are usually more fees that are associated with leasing a vehicle like disposal and initiation fees and termination fees if you want to end your lease early.
- Mileage restrictions: Leased vehicles usually come with mileage restrictions. If you exceed that limit, you’ll end up having to pay a fee for each extra mile.
- No customization options: When you don’t purchase the vehicle and choose to lease, you aren’t allowed to make any customization or changes to it on the interior or exterior.
Buying a Vehicle
If you aren’t looking to lease a vehicle, you may find purchasing a better option. Here’s the breakdown:
Pros of Buying
- Total ownership: You own the car you buy, period. Many find comfort and pride in complete ownership over their vehicle.
- No mileage limits: Obviously, there’s no limit on the amount you can drive when you own your vehicle.
- Customization options: Owning the vehicle allows you to do whatever you want to it.
Cons of Buying
- Costly: The amount of money needed for purchasing, especially a new vehicle, can be more than you have available.
- Good credit needed: Getting a car loan will require a credit check, which can be an issue for those with a poor credit score.
- Unfavorable loan terms: Poor credit scores can lead to high interest rates causing the effective price of the car to be higher.