Should You Buy or Lease?
Should You Buy or Lease?
Selecting a new car is always a tough proposition. When coupled with a choice between buying and leasing, it gets more confusing. Both these options for driving home a new vehicle are prevalent in current markets. They have their own set of benefits and drawbacks that you should assess to make the right choice. From a long-term perspective, buying is a better decision because you can enjoy the perks of ownership for an extended period. On the other hand, leasing is a great choice for short-term ownership where you need a vehicle for limited use. Here, both these options are with their merits and demerits to facilitate an easy decision-making process.
Merits of Leasing a Car
When you decide to lease a vehicle, you don’t have to prepare for a lengthy loan application process or check your credit score. Also, there are no down payments or hefty upfront costs to be paid. You can drive home in a vehicle of your choice with a simple process and a low fee. The monthly payments are up to sixty percent lower in this option when compared to loan installments to be paid for the same vehicle. It’s also convenient to switch from an old vehicle to a newer model. You can drive the latest make and model every two to three years as an added advantage of leasing. The comprehensive warranties make this choice even better.
Demerits of Leasing a Car
Firstly, a leased vehicle does not offer ownership and the benefits entailed in it. The leasing agreement defines the tenure of the lease and number of miles that you can drive in your car. If you wish to end your lease prematurely, the costs can be extremely high. Also, there is a risk of bearing heavy repairs if the car undergoes a major breakdown or wear due to your driving.
Merits of Buying a Car
With a purchased vehicle, you can enjoy all the benefits of ownership that include an ability to customize the car according to your preferences. You don’t need to worry about the numbers and figures. You have the privilege to buy the vehicle and drive as many miles as you wish. Also, you don’t need to worry about the expiry of the lease term. Throughout its lifespan, the vehicle will remain with you unless you wish to resell or build equity to buy the next car. If you can find a genuine and comprehensive insurance plan, there are no financial shortcomings of this decision.
The Demerits of Buying a Car
You get the ownership of a car by purchasing it but this ownership comes at a high cost. There are heavy upfront costs and down payments to be made. Also, you need to maintain your car properly to extend its life term. If a major mechanical failure takes place after expiry of its warranty term, the full responsibility of repairs will also fall back on you.
When making your final selection between these two options, analyze all the points given above.