Buy or lease?
Financial leasing can be a good move, if you are someone who wants the latest model, drives less than 15,000 miles a year and is a conscientious driver. If this is true then leasing can generally offer more favorable monthly payments, or allowing the buyer to obtain a more expensive car with lower payments then they would have through buying. Sometimes leasing can also offer some tax benefits.
But of course when you lease the car is not yours. It belongs to the leasing company and at the end of the lease you walk away with nothing, purchase the car for the residual value or sign a new lease.
Buying pros and cons
Buying has its positives. One positive is that unlike a lease when you finish your payments you own the car out right. Depending on how long you’re financing terms are your car could have significant value. Though, cars can depreciate fast.
Here are some questions you should ask yourself before you start shopping.
1) How many miles do I drive a year?
If you are planning a long road trip or drive more than 15,000 miles a year you should not lease. The overage charges can cost thousands.
2) Do you mind making a monthly payment every month that you have the car?
If you don’t mind making a consistent monthly payment then leasing may be a good option. That way you have a new car every three years without a large down payment.
3) be honest now. Do you take extra good care of your car? Do you make sure to avoid those little parking lot dents and scratches?
If you’re honest and you believe that your vehicle may get those little dents and scrataches then don’t lease. At the end of a lease the car has to be returned in excellent condition. You will be charges for every ding and scratch.
4) Do you like to tinker with your vehicle? If you do plan on modifying you car then don’t lease.
If you modify a leased vehicle then you might affect its value and the leasing company can charge you thousands of dollars.