Leasing versus Buying a Car

If you are looking at leasing, buying a car gives you another option. Many people have debated for years whether it is better to lease or buy a car. There are advantages and disadvantages of both strategies. Here are a few things to consider when trying deciding between buying and leasing a car.

Long-Term Plans

One of the first things that you will have to consider are your long-term plans. Some people prefer to get a car and keep it as long as possible. They want to drive it until they put 200,000 miles or more on it. This way, they can pay off the car in the first five years and then get another few years of driving a car without a payment.

On the other hand, some people value having a new car all the time. They like the thought of having the latest model off of the assembly line. They enjoy not worrying about as much maintenance because their car is always under warranty. The car is cleaner and nicer. You have to decide whether you would like to have the same car for an extended period of time, or if you plan to get a new car all the time.

Depreciation

Another thing that you have to consider is the depreciation of the vehicle. When you buy a car, you get stuck with the depreciation that comes with it. As soon as you take it home, it starts to depreciate drastically. In fact, cars depreciate faster than almost anything else you can buy. When you buy a car, by the time you are done paying it off, it will be worth a fraction of what you paid. This means that you will lose a lot of money when you try to trade in the car or sell it to a third party.

When you lease a car, depreciation does not affect you. You are paying for the depreciation as part of your monthly payment. When you are done with your lease, you simply can turn the car back over to the dealership and let them worry about the depreciation. You can move onto another new car if you want.

Maintenance and Repairs

Another thing that you'll have to think about is the maintenance and repairs on the car. If something goes seriously wrong with a car, you could be out thousands of dollars in repairs if you own it. If it is out of warranty, this could be a troubling proposition. Unless you keep a few thousand dollars in the bank just in case of an emergency, this can be a problem for many people.

With a lease, you just take it into the dealership and let them worry about it. They still own the car and it's their problem to contend with. You can get a loaner car while they are working on it and then you just come back and pick it up when they are done.


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