Ah, it’s the age-old question that everybody asks when it comes time to head to the car dealership: should you lease or buy your next car? Of course, there are pros and cons to both methods and a lot depends on your personal situation. However, if you haven’t been faced with having to choose between leasing or buying before, it can be daunting to decide which option is right for you. You’ll hear plenty of people rave about how much they love, say, Chevy lease deals, but if your planning on putting a lot of miles on your truck, then maybe you need to skip the lease and head right to straight-up ownership. Below we’ve gone through some of the most important reasons you need to consider before you tell the dealership if you’re buying or leasing your next ride.
Reason to Lease: You Love Shiny New Things
Let’s face it, not everyone is going to be satisfied driving around in a ten-year-old car that isn’t fully loaded with all of the newest technology – especially if that ten-year-old car has also started to show its age in terms of wear and tear. The beauty of leasing is that after you drive your car off the lot before you know it you’ll be driving it right back to the dealership to exchange it for either a newer model or perhaps an entirely different car. Most leases are structured in 24-36 month terms, which is really no time at all in the car world. You’ll never have to worry about lagging behind when it comes to the coolest features and you probably won’t have enough time to really worry about excessive wear and tear aging your ride prematurely. In short, if looking like you’re always on the cutting-edge of style and fashion is important to you, you’re probably going to find yourself more attracted to leasing rather than buying.
Reason to Buy: You Love Shiny New Things that You Can Customize
However, there is one important thing to consider when it comes to the aesthetics of leasing and buying a car – and that’s modifications to the vehicle. Do you long for Xzibit to come pimp your ride? Are you always trying to stand out from all other cars in the parking lot? If so, leasing is not your friend since you’re expected to return the car in virtually the exact same condition as which you leased it. If you’re not going to be satisfied unless you get a custom paint job, specialty rims and any other unique customizations on your new car, then go ahead and buy. When you’re the proud owner of a vehicle you’ve actually bought, you can go ahead and install a pink pool table in the back of your Chevy if that’s what your heart desires.
Reason to Lease: You’ll Save Money (but only in the Short Term)
As with almost all things financial, it’s not exactly a cut and dry scenario, but in general, it is fair to assume you will save some money in the short-term if you choose to your lease your car. Typically your monthly payments will be lower on a lease agreement and you most likely won’t need to put much money down – in fact, you may not need to pay a down payment at all. Additionally, because the lease terms are so short, your car will remain covered under the factory warranty, which means you’ll save a bundle should anything go wrong along the way. So if you’re currently looking for a car, don’t want to make a costly investment and want to have lower monthly payments, leasing is a great option for you to consider.
Reason to Buy: You’ll Save Money (but only in the Long Term)
Of course, if it was as simple as “leasing is cheaper” then obviously everyone would lease their cars. Here’s the caveat – yes, you may save on a down payment and yes, your monthly payments may be lower than if you were to buy, but at the end of your lease, you have to turn your car back in, which means you’ve been paying to basically just borrow the car from the dealership. In other words, you have no equity, whereas if you had been making payments towards buying a car, you’d eventually own your ride flat out – with no payments ever due again. This is going to be where a lot of people really struggle to make the leasing/buying decision, but really the easiest way to figure out which choice is right for you is to consult your budget. Figure out exactly how much you can spend on your monthly car payment and that will give you some insight into which option is better for you, at least given whatever your current financial situation is.
It’s also important to note that if you’re leasing, you’re going to be driving a brand new model car, whereas if you choose to buy, you may be okay with a buying a model a few years older – which could save you money in both the short and the long-term depending on the year, make and model you finally fall in love with.
Additional Reasons to either Lease or Buy
Are you right at the brink of a big potential life change – say, having a kid or two? Well, unless you’re going to buy a car that’s big and safe enough to cart your little ones around in now, leasing may be the best option for you, since you can always trade your car in for a model that meets your family’s needs. However, be aware that if you try to trade the car too early, you may be hit with a penalty fee. Carefully consider your current lifestyle and where you see yourself in the next few years before you agree to either leasing or buying.
You’ll also want to head to a dealer with a rough idea of how many miles you think you’ll wind up putting on your car. If you’re a high-mileage driver, then go ahead and start steering towards buying. That way, you won’t have to worry about getting charged if you go over your mileage allowance. Barely breaking 12,000 miles a year? Well, leasing is certainly still in the cards for you.
Ultimately, there is no right or wrong when it comes to deciding whether to lease or buy, but there are some factors that can make either leasing or buying the right or wrong decision for you. Take your time, weigh your options and before you know it, you’ll be driving off the dealership lot feeling confident in your decision to either lease or buy your new ride.