When you’re finally ready to put up money for a new car, you’re immediately approached with a choice. Should you buy or lease a car? Usually, most people would purchase a car, since at the end of the lease, you’ll have nothing to show for all of the money you put in. However, buying and leasing the car isn’t simply just a money decision. Buying vs. leasing a car has many advantages and disadvantages that you’ll want to weigh before making your choice.
What to consider
When thinking about this question, you should first make a list of your priorities with your car to figure out what type of financing or lease you would like to take. Is owning the newest car on the block a high priority or are long term savings more important to you? Do you want to have ownership of your car and be free from car payments, even if you’ll be paying higher monthly costs initially? There are always trade-offs to consider when choosing to buy and lease a car.
Buying vs. Leasing a Car
Now that you know your priority, you can finally make a decision. If you are buying the vehicle, that means you’ll be paying to own the car you’re driving off of the lot. It doesn’t matter how often you drive the car, you’ll always own the car at the end of the payments and, as such, buying a car is an investment in it of itself. However, this does mean you’ll have higher monthly payments than leasing, and you’ll also have to pay for major repairs down the road when your car gets older.
If you choose to lease the vehicle, you are paying to use the car rather than to own it. You can lease a car with a very low down payment, low monthly payments, and no risk of maintenance costs, which also means that you can invest your money elsewhere. You’ll even be able to return your car every 3 years for another new leased car under warranty. The downside to leasing, however, is that you’ll never actually end up owning a car at the end of the payments and you may even have to pay additional fees if you drive your car above a certain mileage limit.
Lifestyle Choices
It really comes down to how you want to live and how you want to achieve that lifestyle with your money. Buying vs. leasing a car should always fall in line with your lifestyle priorities. If you have any financial concerns, you can always discuss this choice with an accountant. Try using TalkLocal. It can connect you to the highest quality local accountants in just minutes!
