How to Decide if Buying or Leasing a Car Is the Best Financial Decision for You
Buying or Leasing a Car
Should you buy or lease? It’s a question most people shopping for cars ask themselves and one that’s certainly worth pondering.
Below are a few factors you can consider in order to figure out which choice fits your financial situation the best.
Think About How You Drive
The first question to ask yourself when deciding between buying and leasing is how you plan on driving.
Leased vehicles almost always have some kind of mileage limit, usually put in place to ensure that the car isn’t too run down at the end of the year.
If you’re only going to commute, you probably won’t face financial penalties due to mileage.
If you plan on cross-country road trips, though, buying a car is going to help you to avoid paying more.
The Replacement Factor
The next step has to do more with your personal preferences. Are you the kind of person who always needs access to the next big thing?
If so, it can be very expensive to buy a new car and to replace it once every three or four years.
Leases allow you to move from car to car seamlessly, giving you a financial incentive to keep moving into new cars.
If you’re not going to keep your car on the road as long as you can, it may not make sense to buy.
Payments vs. Assets
How much are you looking to pay for your car? Your credit and the financing option might make a huge difference when choosing whether to buy or to lease.
Leasing prices might be lower from month to month, but they’re not actually getting you anywhere – when you pay off your car, you’ll be left with a tangible asset that you can sell.
Whether you need a lower payment or you prefer to end up with an asset is a major financial question that you must ask yourself.
Check at the Car Dealership
Finally, go to the car dealership to figure out what the actual cost of leasing or buying will be.
If the dealership is running a special on buying a vehicle, for example, it might make financial sense to buy even if you’d usually lease.
Likewise, a special lease program might make sense in the short-term, especially if you are looking to save money.
Only by checking with your dealer can you figure out the actual cost of either choice.
Don’t be afraid to ask questions about leasing and buying. Each choice is valid, but only one will fit your needs.
Take your time to investigate both so that you can get exactly what you need from your car.
Category: Car Purchase
