What is Buy vs Lease?
Are you in the market for a new vehicle, but not sure whether to buy vs lease? To start, buying means purchasing a vehicle entirely, whether that’s through a car loan or buying it in full via cash. Leasing means having the right to use a vehicle for a set period (usually 2-4 years) without owning it.
This post is about buy vs lease.
Let’s dive into the top 5 pros on buy vs lease.
Buying:
1. Ownership
You get to own the car! If you purchased it with a loan, you’ll own the car once that loan is paid off. So it’s completely yours to use in any way!
2. Mileage
With buying a vehicle, there are no restrictions on the number of miles you can drive with it. This is especially important for those who use their car often and for long distances (say long commutes or frequently taking road trips).
3. Depreciation
While cars depreciate, this may not be of that big a concern if you plan to keep the car for a long time. So while you bear the brunt of it, it could pay off in the long run.
4. Long-term Cost
The cost of purchasing a vehicle will be higher at the beginning, but once the car is paid off, you own the car without additional payments. So once the loan is paid off, it’s completely yours without anymore payments (outside regular maintenance/repairs). Similarly, if you purchase the car outright, it’ll be a dent to your bank account at the beginning, but once it’s paid for, there won’t be any additional monthly payments.
5. Customization
The car’s yours, so you can customize it how you like. Similar to buying a house vs renting. You want to change the paint, install a camera, etc – you can!
Leasing:
1. Limited Ownership
The vehicles that are leased tend to be newer cars. Plus, leasing a car likely will fall under a warranty, meaning the cost to repair and maintain are usually lower. Sometimes, leases will cover routine maintenance, which means you won’t have to bear the full brunt of the cost.
2. Mileage Limits
It is quite typical for leases to come with limits on mileage, and that if you exceed those limits, it can actually result in high fees. So, for those who tend to drive a lot, this might be a drawback in leasing a vehicle.
3. Newer Vehicles
Who wouldn’t want a newer car? With the newest tech, less/no damage, up to date safety features, and more, newer vehicles are usually more appealing. Leasing a vehicle means access to newer vehicles.
4. Lower Monthly Payments
This is especially true at the beginning. Payments for leasing a car at the beginning are usually lower than paying off loans. If you don’t have the cash to purchase a car upfront, this could be a good option.
5. No Resale Hassle
Don’t like the car? Don’t worry! You don’t have to keep it for that long, or worry about how to sell/trade it in! Just return it to the dealer! This isn’t the case with purchasing a car.
To reiterate, the top 5 pros for buy vs lease are:
Buying:
- Ownership
- Mileage
- Depreciation
- Long-term Cost
- Customization
Leasing:
- Limited Ownership
- Mileage Limits
- Newer Vehicles
- Lower Monthly Payments
- No Resale Hassle
There you have it! Interested in learning more ways to save? Check this post out for ways to save on car insurance.
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