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(ARA) - It may not be an age-old question, but the decision whether to lease or buy an automobile is one that puzzles many consumers. Experienced car buyers may know the ins and outs of the lease vs. purchase question, but novice shoppers may not know of the leasing option or why they might want to choose that route.
Leasing is not for everybody; there are restrictions and guidelines that may not fit certain lifestyles. On the other hand, buying a car is a long-term financial commitment that many consumers would rather not make. Following are some pros and cons to consider when deciding whether to lease or buy.
Leasing: The Pros
- There is usually no down payment and monthly payments tend to be smaller than when buying a vehicle.
- Leases tend to last for 2-3 years, allowing for you to drive a new car every few years.
- The factory warranty on new cars will most often last for the entire term of the lease.
- A down payment can be made and the beginning of the lease period, reducing the monthly payments.
- You can lease luxury cars and other vehicles that you otherwise could not afford to buy.
- Generally, you can lease with an option to buy.
- You will not have to worry about trading or selling the car once you decide to obtain a new vehicle.
The Cons
- Because you are essentially paying for the use of the car, you cannot make any modifications to it, and this usually includes audio systems, tires and paint among other aspects of the vehicle.
- When you return the car, it must be in perfect condition. In addition to having no changes to it, there can be no damages to the interior or exterior. If there are any damages or anything wrong with the car, you will be charged some hefty repair costs.
- Cross-country drivers be aware-leases often have monthly mileage limits. Going over the top will result in a fee.
- There are also very heavy penalties for early termination of the lease, so be sure that this is what you want to do.
Many people prefer leasing to buying a car. There is no boredom of owning the same car for 10 years, no reselling responsibilities and the opportunity to drive some lavish automobiles!
However, for those who desire to own a car, it can be a more comfortable experience. Take note of the following:
Buying/Financing: The Pros
- Once the car is paid off, it's yours to sell, trade, junk, etc.
- You can make changes to the vehicle, even during the financing period. You can put in a CD player, paint it, tint the windows, whatever you'd like.
- There are no maintenance or mileage requirements. For anyone who drives long distances, that is certainly something to consider.
- There is no pressure to keep the car in dealer-perfect shape. If you have children or pets, keep this in mind. Accidents and spills do happen, even in the car.
The Cons
- There is usually a down payment necessary.
- Monthly payments are usually higher than when leasing and financing periods can last for up to 6 years, depending on your payment plan.
- Warranty periods may be shorter, and almost never last for the financing period.
- You will be responsible for the car once it has been paid off. If you choose to purchase a different car, it is your job to sell or trade your current vehicle.
When it comes to for you to decide on a plan for your next automobile, consider the above facts. Many people consider driving a good car more important than owning one. For others, the actual ownership and option to do as they please with their vehicle is the better way. If finances are your worries, remember that fines on leased vehicles can add up, so the myth that buying is more costly is often proven false. Whatever you choose, think about your lifestyle, how far you drive, who you drive and where you drive before you decide to lease or buy, and happy car hunting!
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