If you are deciding whether to pay for a new car or just get a loaner, check out some of the major differences between buying and leasing.
Benefits of Leasing a Car
Leasing a car is similar to financing the purchase of the car in many ways, but there are some key differences. You might be able to get more car for less money by leasing. If you enjoy having the newest high-tech features, leasing could be the better choice for you. Since you’d be leasing every few years, With a leased car, you don’t have to worry about selling the car or getting a good price for your trade-in. When the lease is up, you can simply turn in the car and walk away.
Drawbacks of Leasing a Car
Lease contracts limit the number of miles you can drive. These mileage restrictions typically are 9,000, 12,000 and 15,000 miles a year. Another potential downside to leasing is that usually only shoppers with good credit scores will qualify for a car lease. If your credit score is less than perfect, you may want to consider waiting to lease until you can increase your credit score.
Benefits of Buying a Car
if you like to keep your vehicle as long as possible, buying is probably better for you. One of the biggest benefits that buying has over leasing is that there are no mileage restrictions. If you do a lot of driving, buying is probably better for you. The benefit means that over several years of not having a payment, you could save money compared to someone who has to keep leasing a new car every three years.
Drawbacks of Buying a Car
When you buy a new car, you play a bit with its resale value. It’s hard to determine what the vehicle will be worth when you’re ready to trade it in or sell it. Another potential drawback of buying is a sizeable down payment. Many lenders require about 10 to 20 percent down when taking out a car loan.
The decision to lease or buy will always depend on your personal circumstances. If your objective is one day to be rid of pesky little car payments and you actually want to take ownership, buying a car may be the best option. If, however, if your goal is to drive a new set of wheels every four years and minimize your monthly costs, leasing a car may be a good alternative.