The leasing vs. buying a car debate has been around for a while, and most people might assume that buying a car is a much more feasible option for the general populace. Even if car sales have reportedly made a strong comeback this last year, there’s never been any substantial reports about how much people are leasing. For those who wonder how their neighbor managed to get that hi-tech car they possibly couldn’t afford, it’s possible leasing has slipped in under the radar.
Leasing is certainly an option that you should consider if you don’t mind some limitations in your driving and turning in your car after a set number of years. But then, because of certain limitations, leasing is far from perfect. Purchasing is too, due to other factors that could affect you beyond your finances.
With that kind of unequal balance on making a definitive decision, how do you weigh the options to make a choice?
Deciding on Buying a Car
The most substantial positive to buying a car is that you can have your car for as long as you want and never have to turn it back in as you do with leasing. You also have the freedom to put as many miles on it as you want, unlike leasing that has mileage restrictions. For families, this can be an advantage if you find a car that you’ll be able to love for the next decade or more. Conversely, buying can mean your car becomes outdated within a few years no thanks to car technology changing dramatically each year.
Another disadvantage to buying is that you may have to get something cheaper than you wanted just to be able to afford a vehicle. That can be a problem for those wanting the latest car gadgets. Plus, owning a car still works technically like leasing if you make payments on it for years ahead. You can’t do anything to alter the car until your loan is officially paid.
Verdict: Your final decision should be based on how you view the future in driving. Those with families who prefer a long-term investment will find an easier decision to make here. Others may just be forced into it, only because they need to use a car for long commutes.
Deciding on Leasing a Car
The biggest appeal of leasing for most people is probably being able to drive a hi-tech car for a set rate every month. You might be able to find some leasing companies that can lease you those new cars for cheaper rates than a monthly car payment would be. However, that might not be the case for an overly luxury car. Leasing companies generally base the rate you’ll pay on the predicted value of the car after your lease contract ends.
As mentioned, the worst sides to leasing are that you have limitations on how long you can drive and how many miles you put on the car. You’re also responsible for basic maintenance, and that can mean lack of building equity that you’d have if being the owner.
Verdict: For those who love the latest car tech and want to show off a car they otherwise wouldn’t be able to afford will make leasing an easier decision. Those who get bored owning the same car for the next quarter of their lives will also prefer leasing because they can change their car every couple of years.
Yes, it’s easy to think that leasing will build bigger momentum in the future as people struggle to finance a new car. Regardless, it’s going to be based on more personal directions in their life that sometimes go beyond finances. It could mean those who buy and lease a car in America will be split down the middle.