Both routes have their advantages, but making the right decision is entirely based on your personal needs and situation.
You’ve been searching for a new vehicle for weeks, and after seeking out different dealers and looking at dozens of manufacturers and models, you’ve settled on your dream car.
For many consumers, they are still faced by one big decision: whether to buy or lease their purchase. Both routes have their advantages, and making the right decision is entirely based on your personal needs and situation.
Here is a quick list of the key benefits of each option:
Leasing Can Mean Lower Monthly Payments: If you are going to have to finance some or all of the purchase, leasing is attractive for the reduced monthly payments. Instead of financing that is based on the full value of the vehicle (minus your down payment), leasing only charges a driver based on the difference between the purchase price and residual price after depreciation. So, if you keep your car for 3 years, you will only be charged on the drop in the vehicle’s value.
Buying Means Monthly Payments Will Eventually End: Buying your car through financing means that a consumer can calculate not only the cost per month, but also the exact point when their monthly payments will end. This kind of certainty is valuable in budgeting and planning for your financial future.
Leasing Can Easily Be Written Off as a Business Expense: Consumers who are self-employed have a far easier time writing off a lease as a consistent business expense than calculating the cost of car that is being purchased outright, where issues like depreciation and expense associated with maintenance.
Buying a Vehicle Requires no Restrictions on Annual Distances or Damages: While lease agreements have a variety of rules of how much you can drive a car per year, or what kind of wear and tear is acceptable without additional charges, none of these considerations exist when buying a vehicle. For a person who does not want to constantly second guess the types of activities they engage their vehicle in, buying provides a far freer arrangement.
Leasing Allows You to Drive a Newer Model: For those who believe that variety is the spice of life, leasing is a way for you to continually upgrade your vehicle for the a recently released model that has that new technology or feature you crave. There is something very enticing about having the ability to upgrade your vehicle every few years.
There is Equity in a Vehicle that is Purchased: There is always a value in a car that you own, either through reselling it in a private sale, or using it as a trade-in towards a down payment for your next vehicle. Understanding how what you drive serves as a financial asset is reassuring for those that feel they are on a constant treadmill within leasing arrangements.