Should I buy or should I lease a car? Following are some advantages and disadvantages of buying versus leasing a car:
When you’re in the market for a vehicle, there are so many options to consider that it can be overwhelming. When it comes to whether it’s better to lease or purchase, there really isn’t a set answer without considering all the aspects of both options and which suits your lifestyle best.
As an example, some vehicles used for business purposes can be used as tax write-offs, in which case it may be better to lease so your vehicle can be turned in more often and reduce the overall cost of maintenance and repairs. But if your goal is to use your vehicle as a regular daily driver and keep the associated costs as low as possible, purchasing a new or used vehicle and maintaining it as long as possible may be your best option.
At the end of the day, there are benefits to both buying and leasing. Your own personal decision may come down to your own personal priorities and preferences rather than simply the cost difference.
Because everyone’s situation is different, here are some pros and cons that come with leasing or buying a vehicle that might point you in the right direction. You can also contact one of our sales consultants to go over your situation and needs to decide which is best for you!
Advantages of Leasing:
- Monthly payments and down payments are generally less expensive.
- Your vehicle will be more current with newer features.
- Your vehicle will always be under factory warranty, minimizing your vehicle maintenance costs.
- You can easily switch into newer cars more often.
- Sales tax is much less than when purchasing.
- You don’t have to go through the hassle of trade-in valuations.
Disadvantages of Leasing
- Though you can opt to purchase afterward, you don’t own the vehicle at the end of the contract.
- Allowed mileage is restricted and can result in a penalty if exceeded.
- Lease contracts are often more confusing than purchase contracts.
- Over time, leasing is more expensive than an outright vehicle purchase.
- Excessive wear-and-tear penalties and fees can be issued at the end of the contract.
- Early termination of the lease contract is very expensive.
Advantages of Car Buying
- You aren’t restricted to factory standards and can customize your car how you like.
- Car buying is less expensive over time.
- With no excessive mileage fees, you are free to drive your vehicle as much as you’d like.
- You are able to sell your car at any time as the owner of the vehicle.
Disadvantages of Car Buying
- You typically need a larger down payment to offset any negative equity if you are “upside down”.
- Monthly purchase payments are typically more expensive than lease payments.
- After the factory warranty expires, you are responsible for all repair costs.
- You may run into the headache of trade-in negotiations if you want to sell at a later time.
- Your vehicle experiences depreciation over time, the majority being lost in the first two years.
Long story short, leasing a vehicle can seem less expensive, but over the course of time it is actually more expensive because you never establish equity in the vehicle. Buying frees you from the restrictions that come from leasing such as mileage and condition terms – the car is yours to do what you will with it. At the end of the day, knowledgeable vehicle purchasers examine their own situation and needs to come to the decision that will cater to their lifestyle the best. And if you need help making that decision, our team at Car Pace will help you out every step of the way.