Buying or Leasing a car…What makes best sense?
The current auto market has really gotten people in the market for a new car wondering if they can actually afford a car, whether it be new or used….or, can they even find a car that fits their needs and lifestyle.
And, when they do find a car, how do they purchase it? Do they pay cash out right and own the car, or do they finance the car with monthly payments until they have paid it off and then own it. Or, is it better to lease a car with typically lower monthly payments, but have nothing to show for those payments?
Paying cash for the car or financing the car will allow you to eventually own the car, but with that comes the potential of having to spend money on repairs and maintenance. Leasing a car on the other hand, generally has lower monthly payments, and is overall less expensive because you might not have to expend money on yearly maintenance and other repairs.
But, there are disadvantages to leasing. Within the lease contract, there is usually a mileage limitation, and should you go over that limitation, you could be stuck with a with a significant penalty. Also, those small dings and scratches, or wear and tear, on the doors or bumpers might not bother you, but when you turn in the car, you could be looking at a significant amount of money to bring the car back to “showroom condition”.
In short, buying or financing a car is good for you if you:
- Want to own the car and plan on driving it long term for many years
- Do not mind paying for repairs once the warranty expires
- Drive a significant amount of miles each year
- Do not want to risk the unknown expenses that might occur at the end of a lease
Or, leasing might be a good option for you if you:
- Like driving a new car every few years
- Prefer having a car always under warranty
- Do not drive a significant amount of miles each year
- Simply do not want to worry about ownership of a car
The big question for you to consider is do you want to “own” a car, or simply “rent” a car? And, with the current car inventory situation, and there is no crystal ball to see when it will get better, that question must seriously be considered.
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About the Author:
Larry Benator is the Community Development Manager for Excel Federal Credit Union.
Excel Federal Credit Union was formed in 1952 and serves the Gwinnett, Forsyth, Fulton, and Hall communities.
To learn more visit https://www.excelfcu.org/
Buying or Leasing a car…What makes best sense?The current auto market has really gotten people in the market for a new car wondering if they can actually afford a car, whether it be new or used….or, can they even find a car that fits their needs and lifestyle.