We know that car buyers find it really hard to choose between leasing and actually buying a car. While the latter may be more expensive at a certain point, the first may prove to be pricier in the long run. In the same time, getting a brand new car, using it for a couple of years and then discarding it the way you want to is a luxury of owning it. At the same time, leasing an automobile actually means that you can benefit from using a brand new car (and a cool model, too). Whenever your lease contract expires, all you have to do is go to the dealer and ask for another ride.
Let’s discuss the pros and cons of leasing vs buying a car
We gladly took the time to make a simple list of pros and cons both for leasing and for financing a vehicle.
Why should you lease a car?
The first and most important advantage to leasing an automobile stands in its freshness. You could get anything from a 2015 Cadillac Escalade to a 2015 Audi A4. On the other hand, when buying a car, this of course doesn’t happen, because you have to pay the full amount of the car and therefore can’t afford new models restricted to budget.
At the same time, if you lease a car, you ultimately end up paying less at the beginning of the process.
Why should you not lease a car?
This decision is related to a series of risks. The first one is prepaying for the vehicle. Let’s keep in mind that if someone steals your car or it gets damaged in any circumstances, you might never see your initial payment again. In a worst case scenario, if you can’t pay your monthly rates, the bank can take away your car and your down payment has a high chance of not meeting the inside of your pockets.
The second con of leasing is that almost every owner is forced to get gap insurance coverage. If your ride gets wrecked (be it your fault or not), you still have to pay for it and the whole point of leasing is keeping your car in perfect shape.
Had enough of disadvantages? Sorry, we’re not over yet. Let’s say you do maintain your car and perfectly take care of it. Nobody can refrain from driving a top automobile, can they? And so will you – you’ll take your drive as far as possible and even pick up some friends or relatives, while you’re on the way. But guess what? Leasing contracts state that you are not allowed to go over 12,000 driven miles per year. Some dealers are a little more reasonable, and so they’ll let you drive for 15,000 miles before applying any penalty. Curious about the latter? It’ll cost you money. You’ll be forced to pay between 18 to 25 cents more per every mile you drive in your leased car.
And finally, the greatest disadvantage to leasing a vehicle is you won’t be its true owner. Sure, you can always exchange it after the end of your contract, but sometimes it’s healthier to sell your own car with whatever the price you ask for it, instead of giving it back to the dealer. And remember, the longer the lease, the higher the costs. Trying to get out of a lease will ultimately cost you more than buying a car of your own.
Why should you buy a car?
Something that we simply have to say is that we perfectly understand that people nowadays cannot afford buying a car as easily as they would a slice of pizza. It certainly is a big investment, and one that not all families can make. But sometimes, it’s worth the effort.
There are roughly two ways of buying an automobile: you either pay for it at once, or make monthly payments. In the second case, you’ll obviously need to pay more than the actual price of the car, but you’ll still end up spending less than on a lease.
So the obvious advantage to financing a car is you will be its only owner. You’ll do whatever you want with it and therefore, you’ll be able to sell it after you’ve finished paying for it. Sometimes, you can even sell it while you’re still paying for it.
Why should you not buy a car?
Cars become outdated very fast. New models are launched every year, and manufacturers sometimes even release two versions of the same model in the course of the same year. If you’re seriously keen on driving only new vehicles, think again before buying an automobile.
Monthly payments are seriously higher when buying. Contracts are pretty stiff and you can still risk losing your car if you miss a number of payments. There’s a catch, though. This time, no one gets to tell you what you need to do with your car. If you crash it, your monthly rates won’t increase. You’ll simply need to pay the same amount of money and you might just fix it at your own cost.
Actually purchasing an automobile is a remarkable process, because in this case, what you see is what you get. People oftentimes ignore the fact that if they choose leasing over buying, they may end up paying more than 40% of the initial value of the vehicle. If you’re curious what you might pay for a recently launched automobile, we recommend you use an online calculator, such as the one provided by Bank Rate. In the past, the acclaimed automobile reviewer Cars.com made an estimate of the supplementary sum you might need to get out of your pockets if you lease. And it clearly isn’t a low figure: $6,752.
To conclude, we’ll tell you that your choice is yours alone. The amount of money you risk spending on a lease might not be so important to you if you’re among the lucky ones that afford a lavish lifestyle. But hey, not all of us are P. Diddy, so we gladly recommend you buy your ride if your situation allows it.