How to Decide Whether to Lease or Buy a Car

March 20 08:52 2018 by Demarco Gonzalez Print This Article

If you cannot decide whether to lease or buy a car, you’re not alone. Deciding on the best financing option for you is tricky, as both a lease and a car loan can be with you for a long period of time. Here is a guide along with pros and cons involved with leasing as well as buying and find out the best option for you.

Leasing and Buying – The Meaning

Leasing a car involves you –

• Borrowing a vehicle under a specific contract that allows you to use it to drive an average number of kilometres each year
• Leased cars are covered under warranty
• Leases allow you to upgrade your car every 2 or 3 years

Buying a car involves you

• Purchasing a vehicle so that you own the vehicle
• You can buy a car using a car loan, which can be paid off in a period of up to 7 years, or by buying the vehicle outright

Leasing and Buying – Pros & Cons

Leasing – Pros

• Down payment is low and Monthly payments are even lower than loan payments
• Easier to get than a loan even with a bad credit score
• Maintenance costs are low and No depreciation concerns

Leasing – Cons

• If your leased car omits down payment, you will need to pay that expense every time you get a new lease
• Mileage can also lead to extra costs

Buying – Pros

• Help Builds up equity
• You don’t need to worry about mileage limits

Buying – Cons

• A car depreciates in value quickly
• Monthly payments are primarily higher than leasing

Which Is Better: Leasing Or Buying?

It’s totally up to your personal circumstances and preference.

• Individuals who like to drive a brand new car and keep up with the latest models, leasing is probably more appealing to you, as you can change your vehicle more frequently, and monthly payments are also affordable.
• If you like your car to feel like yours’ and are happy to keep it for a longer period of time, buying is probably the best option for you.