Buying vs Leasing a New Car: the Pros and Cons
Deciding between buying vs leasing a new car can be tricky, so the experts at Are man she towards developed this quick guide to help out Palm Coast and Port Orange drivers.
Customers trying to understand buying vs leasing a new car realize quickly that leasing is similar to financing with a loan, but you enjoy more car for less money since the monthly payment isn’t based on the whole value of the vehicle. In other words, you’re mostly covering the depreciation value of the model while you have it. You also won’t be expected to part with as significant a down payment, though an extremely low one will necessitate higher monthly payments.
Most leases last approximately three years – roughly the length of the warranty – though you will need to maintain the vehicle properly. You’ll also have the option either to exchange it for a new model or walk away completely at the end of the lease.
Lease contracts limit the number of miles you can drive, typically to 9,000, 12,000 or 15,000 miles a year. You’ll have to pay a per mile fee if you go over, so try to estimate how much you drive each year first. You’ll also cannot make major alterations to the vehicle, and you don’t have anything to show for your monthly payments at end of the term. Additionally, a less than perfect credit score may prevent you from qualifying at all.
When considering buying vs leasing a new car, buying allows you to keep the vehicle, and your payments – though a little larger – will ensure that you actually own the car when the loan is paid off. You can keep it at no monthly costs other than fuel, insurance, and upkeep, or you can sell it when you see fit. There are no other restrictions, which means you can drive as much as you want and make all the alterations you desire.
It’s difficult to determine resale value when you buy a new car, so you might end up with a vehicle that is worth less than what you paid for with the loan. This could mean taking a loss if you sell, especially if you still have a loan balance. You’ll also need to save for a more significant down payment – usually around 10 to 20 percent of the vehicle’s overall value. Lower payments will necessitate a longer loan term, too.
Learn More about the Perks of Buying vs Leasing a New Car
There’s no correct answer when it comes to buying vs leasing a new car; you just have to take your budget, driving requirements, and credit history all into account. The important thing is to choose an option that fits your lifestyle comfortably. At Are man she towards, we provide Palm Coast and Port Orange drivers with impartial advice, so get in touch if you still need to talk over your best options.