Car Leasing VS Buying: Things To Know

If you are considering car leasing vs buying, there are definitely some important things you need to know. There are pros and cons for each option, and making the right decision depends on your specific situation and preferences. Here are some specifics about car leasing vs buying.

Your Driving Preferences

Do you like to drive like a wild person? Do you plan on putting a large amount of miles on your car? If you answer "yes" to either of these questions, leasing a car may not be a smart decision. When you lease a car, you are restricted to drive a certain amount of miles per year, usually between 12,000 to 15,000. You'll be paying 20 to 50 cents per extra mile, and those miles can add up if you're driving a lot. Lessors also expect you to take decent care of the car. If you constantly drive it like it's a race car, you'll probably rack up some excess wear and tear, and you'll have to pay for it at the end of the lease.

Your Modification Preferences

Are you interested in giving your new car some bodywork? Will you be tempted to rip out that old stereo system and install something new? Do you want to modify the engine or tint the windows? If you really want to do any of these things, you'll have to buy a car. Leases usually restrict you from modifying the car in any way, so unless you want to be pounded with charges at the end of your lease, buy a car when you want to modify it.

Your Maintenance Preferences

If you can't stand the drama of taking the car to a mechanic, evaluating what's wrong with it, and deciding what to fix and how to pay for it, you probably don't want to buy a car and keep it once the warranty expires. For people like you, a lease is a good option. New car lease terms typically coincide with the vehicle's manufacturer warranty, so if it has any problems, you won't really have to worry about diagnosing and paying for them.

Your Up-Front Cost Preferences

Do you want a new car but you don't have a large amount of cash on-hand? You should consider leasing a vehicle. Leases usually require little or no down payment, while new car purchases can require down payments in the thousands. If you want to save some money initially, you may want to lease.

Your Monthly Payment Preferences

How much money do you want to spend per month? If higher monthly payments scare you, a lease can help. Leases usually require smaller monthly payments than vehicles purchased through financing. Just know that when you buy a car, you have the possibility of eventually being free of monthly payments once it's paid off.

Your Owning/Selling Preferences

When you want to get a new car, will trading-in or selling your old vehicle prove to be a huge hassle? If so, look into getting a lease. When your lease term is up, you can just go out and lease another vehicle. When you have a purchased car and you want a new vehicle, you will most likely have to try to sell the car or trade it in.

Trying to decide between car leasing vs buying does not have to be difficult. Think about the differences between each option and see how those differences would affect you. Use the tips in this article to help you figure it all out.