Tags: lease | buy | car

Should I Lease or Buy a Car? Which Is Best?

By Friday, 31 July 2020 08:30 AM Current | Bio | Archive

Buying or leasing a vehicle can get confusing, knowing the facts will tell you which is the better option? The truth is that there are two aspects to this decision.

If you’re in the market for a new car, you may be debating whether to buy or lease. The choice between buying and leasing has often been a tough call.

On one hand, buying involves higher monthly costs, but you own something in the end. On the other, a lease has lower monthly payments, but you get into a cycle where you never stop paying for a vehicle.

6 Pros to Leasing a Car

  1. No or low down payment
  2. Usually covered by warranty
  3. Lower monthly payments
  4. No upfront sales tax fees
  5. No depreciation concerns
  6. Leases often are cheaper in the short term.

7 Cons to Leasing a Car

  1. When you lease, you're basically paying for the use of the vehicle for the first 2 or 3 years of its life. No equity
  2. Limited Mileage - typically 10,000 - 15,000 miles
  3. Hard to Cancel. There are companies like www.swapalease.com but there is a financial punishment, lease termination fees.
  4. Requires Good Credit. The typical minimum for most dealerships is 620. A score between 620 and 679 is near ideal and a score between 680 and 739 is considered ideal by most automotive dealerships.
  5. Lots of Fees at the end and on over mileage
  6. No Customizations.
  7. Average cost to lease is 14%. This is the most expensive way to own a car.

The difference between leasing a car and financing a car is that with financing, you are purchasing the vehicle. You will still make monthly payments, but at the end of the term, you'll own the car.

5 Pros to Buying a Car

  1. You are making payments towards owning the vehicle.
  2. No mileage limits without worrying about penalties.
  3. Ability to sell car anytime
  4. Freedom to customize or modify to your choice
  5. Generally lower insurance costs

5 Cons to Buying a Car

  1. Unpredictable resale value
  2. Higher monthly car loan payments
  3. Post warranty maintenance expenses - when you own a car past its warranty expiration, the costs of all repairs fall on you.
  4. Depreciates over time - excessive mileage and wear and tear will harm your car's resale value,
  5. Large down payment

Lease Summary: If you like always driving the latest models or don’t have the credit or money to buy a new car, leasing may be a smart option. If you drive between 10,000 - 15,000 miles this is a good option to consider.

Buy Summary: If you plan to keep your car for a long time, modify it or drive a lot of miles, it makes more sense to buy. You should own a vehicle for at least 3 years to get the most of your purchase.

Choosing whether to buy or lease a car is a serious financial decision. Research terms, compare payments, and calculate how much you'll pay in each option over the term of the loan or lease. Always negotiate the price first whether you opt to buy or lease a vehicle.

And Never Pay Retail.

Lauren Fix, The Car Coach® is a nationally recognized automotive expert, media guest, journalist, author, keynote speaker and television host. Post your comments on Twitter: @LaurenFix or on her Facebook Page.

© 2020 Newsmax Finance. All rights reserved.


   
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Buying or leasing a vehicle can get confusing, knowing the facts will tell you which is the better option? The truth is that there are two aspects to this decision.
lease, buy, car
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2020-30-31
Friday, 31 July 2020 08:30 AM
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