Should You Buy or Lease a Car?
So what is the best way to finance your next car — buy or lease? With so many trade-offs, it is pretty difficult to give this question a quick answer. However, you can reach a sound decision by taking a closer look at your lifestyle, your many requirements and your personal preferences. For instance, if you require an upscale posh sedan for business, maybe to entertain important clients, it is a good idea to lease as it makes it possible for you to drive an uber-luxury car without spending a fortune. On the other hand, if you do not need the status of a new vehicle and want your automotive costs kept as low as possible, you should buy a new or used car and drive it for as long as it gives you reliable service.
How Leasing Compares with Buying
With lease deals, you need to make a down payment, which is, in most cases, is calculated as the monthly rent’s multiple. When you make a bigger initial payment (for example, equal to 9 months rather than 6), it lowers the subsequent monthly payments you have to make. You are usually given a choice. Leasing gives you peace of mind.
Leasing also gives you the upgrade factor. Generally, leases are between 2 and 4 years, which means that the car will almost always be covered by warranties and you can drive them without any problems. These are every car’s best years and once your lease is up, you can trade it in for another latest model.
On the contrary, if you applied for a 5-year loan to make an outright purchase of the car, you would stop making monthly payments after 5 years. It will only be a while before you reach the break-even point.
In a nutshell, when you lease a car, you get more car for less money more easily. This is because you make payments only for the value of the car rather than purchasing and owning its entire worth. But buying a car frees you from the oversight that comes with leasing. It is ultimately up to you to weigh the pros and cons, take a look at and determine your needs and make a decision on which suits your lifestyle the best.
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FYI: Original article found at Moneyantics.com
