Should I Lease or Buy My Next New Car?

Have you ever wondered why some car commercials are more geared towards leasing rather than selling? Is there a reason leasing is better than buying for the consumer? More importantly, what exactly does leasing involve? Let’s take a closer look at whether or not you should buy or lease your next new car.

Pros and Cons of Leasing

When you lease a vehicle, you are basically paying to use it, but not buying it. In many cases, a down payment is not required to lease a car. After the first month, you begin to make monthly payments. Other costs of leasing a vehicle include banking fees, taxes, title, registration, and a security deposit. Other expenses may include fees for going over a certain mileage per year or damaging the car. However, there are still many advantages of leasing a car. First of all, leasing a car costs less than buying one. Another benefit is you will not have to stress yourself with selling the vehicle when you’re ready to trade up. Speaking of trading up, when you lease you’re able to upgrade when you want. However, you may have to pay a fee for breaking the lease. Of course, there are just as many disadvantages to leasing. First of all, you don’t own the car. This means you can’t customize the car. Another disadvantage is that you have to decide quickly whether or not you want to purchase the car. Lastly, you will have to purchase the maximum insurance available, which can be costly.

Pros and Cons of Buying

Buying is obviously the most popular choice among buyers. The first advantage to buying a car is that you own it. You can make customizations, it doesn’t matter how much you drive it, and you’re not required to get top of the line insurance. However, there are drawbacks to buying. The first drawback is that monthly payments can be much more expensive. In most cases you are also required to make a down payment.

Which Is Best?

The truth is each option has a number of pros and cons and that means that one option will be great for some, while not for others. It’s best to review the pros and cons of each option to determine what works best for you. For example, if you want to always be upgrading, without making down payments or having to worry about selling, leasing may be the best option. However, if you want something to show for all the money you’ve spent, buying is the way to go.

Think about what you really want from your money before signing the lease or the loan papers. This isn’t an option to take lightly.

About the Author: Fidel Mirra is a auto mechanic who takes care of a wide variety of vehicles, from older models to high-end cars. No matter what you choose, make sure you purchase a roadside assistance plan to aid you if you are ever in need after a breakdown.

Image: emilio labrador / Flickr

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