At one point or another, buying a car is reality we all must face. And if you’re new to the process, it could seem overwhelming.
“What model best fits my personality? Is red color too flashy? Should I play it safe with white? Will I look cool driving in it!?”
Believe it or not, PICKING the car is the easiest part of the whole process! The decision with the biggest implications comes when the salesperson asks if you would like to lease your vehicle, or finance it with a loan?
The question isn’t that difficult to answer but it can have drastic differences in your out-of-pocket cost. With a bit of education on the subject, you can say goodbye to uncertainty!
To help you with this, we’ve made a simple list of the pros and cons for Leasing vs. Buying.
- Unlimited Mileage
- Easier to Finance
- Higher Monthly Payments
- Higher Up-Front Costs
Do you have a down payment? Would you like to own your car? Are you worried about adding more than 15k miles per year?
If you answered no to any of those questions than buying a used car is for you!
- Lower Monthly Payments
- Up-To-Date Car Features
- Ability to Trade-In after leas period
- No Ownership
- Limited Mileage
- You Need Good Credit!
Leasing a vehicle has its advantages. And one of those advantages is the low costs.
The lack of ownership is one of the larger drawbacks of leasing. Once you’re done making all your payments, that money is gone forever.
Another thing that might put you off is the limited mileage. Almost all leasing contracts come with mileage limits. On average, dealers charge $0.20 per mile. This might seem insignificant, but it can quickly add-up to a hefty sum.
If you have bad credit, you can forget this option.
Lease applicants need a strong credit score to qualify for this deal. Given the risk taken by auto dealers, it makes sense they only want those with a history of reliability.
Should I Lease Or Buy?
Getting approved for an auto purchase is MUCH easier than a lease.
If you prefer lower costs, want the latest and greatest in technology, AND have excellent credit, then go ahead and lease your next vehicle!
But If you drive a lot, want to build equity, or have bad credit. You should consider ownership!
And remember that with both options, you can easily reduce your cost by deciding to go with a used car instead of a new one.