Buying or leasing a car – it’s a question you may find hard to answer if you’re interested in acquiring a new vehicle. In fact, it’s a question than can even get experts into trouble, as Marc Frons, a widely respected finance journalists for the New York Times, openly admitted in an informative article. What makes the decision so difficult is that there’s a plethora of things to consider.
To assist you with taking an informed choice, we’ve put together an introduction that will help you get started.
Buying a car versus leasing a car: A lifestyle question
Perhaps the most important thing you should be aware of is that the decision between buying a car and leasing one is not purely a financial one. As Phillip Reed, a consumer advice editor at Edmunds put it in a feature for Howstuffworks, it is also a lifestyle question relating to you personality.
Whereas some drivers feel comfortable using the same car for many, many years and actually draw a sense of security from it, others get bored far more quickly. If you want to update your car every so many years and enjoy the benefits of a more current model, then leasing may be your best option, even if it should turn out to be a heavier burden on your purse.
Buying a car: pros
Generally speaking, most people still prefer buying a car over leasing one. Here are some of the main pros:
- When buying a car, there are no mileage restrictions.
- You can pretty much do whatever you want with your car, as long as you’re keeping within safety regulations. Which means you can modify it and should you spill coffee on the seats, you won’t have to worry about the consequences straight away (you might want to avoid it nonetheless).
- A car you actually own can be quickly bought off in case of an emergency and thus offers more financial flexibility. Granted, depreciation will mean that you’ll lose some money in the process. But then again, depreciation is always factored into leasing rates as well.
- After paying off your car, it belongs to you and you no longer have any monthly instalments to deal with. In comparison, leasing a car means you’ll have to pay a monthly rate to your dealer for as long as you choose to work with him.
Leasing a car: pros
Leasing a car is by no means a bad alternative to buying. It, too, has some benefits:
- Your down payment will typically be considerably lower.
- Although you’re paying monthly instalments throughout the entire leasing period, they tend to be significantly lower than with a bought car. On the other hand, insurance can be higher. So you’ll have to do the math to determine the exact costs.
- If you’re dealing with financial difficulties, leasing a car may be easier than finding a car loan.
- You’ll get a new car every 3-4 years. Since technological improvements can bring down petrol consumption, this may reduce your overall costs. Again, you need to factor this into your considerations.
Buying a car versus leasing a car: Conclusion
As mentioned previously, financial considerations are not the only thing you’ll need to keep in mind. At the same time, they’re obviously very important. If you intend to keep and drive your car for a longer period of time, buying is generally considered to be cheaper than leasing: You simply pay off your credit and can then use your car without any monthly burdens. If a new car is too expensive, you can find excellent used cars that will meet your demands and come at remarkably lower prices.
And there’s really no reason to worry about getting a loan. At Concept Car Credit, we can usually find a solution for your problems even if you’ve run into problems in the past. Just give us a call or drop by our showroom!