When it’s time for a new car, do you buy or lease? It can be a tough decision, especially since there are so many factors to consider. Let us help by breaking down the pros and cons of each choice.
Before you make a decision, we encourage you to consider a few factors:
How much money are you willing to pay per month to either lease or purchase a car?
Do you have money for a down payment? How much?
How much do you drive? If you have a long commute or if you like to travel, that might influence your decision.
Be honest. Are you hard on a vehicle? Do you have pets or kids? Do you anticipate scratches, dents, or fender benders?
If you lease a car for business, a portion of the costs can be deducted. It may be worth it to take advantage!
How long do you intend to keep the car? Do you foresee your job or financial situation changing? There can be penalties for breaking a lease before your term is up.
If you intend to keep your vehicle for a long time, you’ll probably want to purchase rather than lease. That way, as soon as the loan is paid off, the car is yours. And generally, buying is cheaper than leasing in the long run. Gas, insurance, and routine repairs will continue, but you’ll save more money over time when you no longer make a car payment. Our best advice to you? Pay off your car quickly and take care of it with regular maintenance.
Do you have a lengthy commute? If you do, buying makes even more sense. Leasing comes with a mileage restriction. If you’re not interested in tracking your mileage, it’s best to simply own the car.
One of the biggest problems you face when you buy a car is depreciation. When you buy, you open yourself up to fluctuations in the market. Some people feel that your car begins losing value the minute you drive it off the lot. That’s why we believe maintenance is key, especially for vehicles you plan to keep for a long time.
The other problem is the purchase price and terms of your car loan. Lenders often require a sizable down-payment and, depending on the market at any given time, interest rates can fluctuate. We encourage you to consider the cost, the future value of your car, and the number of miles you intend to put on it before making your choice.
If you hate the idea of haggling over the price of a new car, taking care of the repairs that are inevitably needed, or going through the time-consuming process of selling, then leasing might be the best option for you. When you lease, the only thing you’re really paying for is the depreciation that occurs during the time you drive the vehicle. Oftentimes, lease payments are lower than monthly loan payments for buyers.
A lease is usually good for three years. At the end of that time, you simply return the car to the dealership and lease a new one if you choose!
The biggest con when it comes to leasing is the mileage factor. Lease contracts limit the number of miles you can rack up before you begin to pay penalties. So, if you have a lengthy commute or enjoy road-tripping, you may be in for an unwelcome surprise at the end of the lease.
Another con to consider is the potential for wear and tear. Dealers usually require that you return the vehicle in its original condition. It’s worth thinking about if you’re not a tidy person or if you’re into making alterations to your vehicle. At any rate, you’ll want to check the small print before signing your name to a lease.
One final mention? Consider your credit. Often, only shoppers with great credit scores will qualify for a lease. Plus, while you’re leasing, you’re not building equity in the car. For those who prefer to buy instead of rent, it’s worth thinking about.
We hope we’ve answered a few of your questions! Remember, if you need a car shipped, whether you’re leasing or buying, JP Logistics can help.