Buying vs Leasing

Buying vs. Leasing - What's Your Lifestyle?

Buying (Pros)
There are many advantages to buying a car. If you are the type of person who likes to hang on to your vehicle until it dies, then buying is the option for you, here’s why: First, it’s your vehicle, plain and simple. You can modify it anyway you like (as long you don’t void your warranty). Since you will be keeping the car its entire life span, you will save money in the long run by paying off the loan in 4-5 years, then having a few years afterwards of no monthly payments. There are no mileage restrictions. Finally, if you buy the vehicle outright, you have the option to sell when you want. Just keep in mind, if your loan has not been paid off, compare the loans pay off to the vehicle’s worth. If it looks like you will break even, or earn a little extra. Go for it! Otherwise, hang on to the car, or sell and except the lose.

Buying (Cons)
There are many advantages to buying a car, but there are some disadvantages as well. First, let’s say you have had the car for a while and now the warranty has expired. You are now responsible for any repair or maintenance costs to the vehicle. You can extend your warranty with the car manufacturer, but now you can find companies that are jumping on the warranty band wagon that could offer a better price for the coverage. Next, you’re also responsible for the logistics of selling or trading the vehicle, and do me a favor before selling or trading in your car, make sure your compensation is more than the loan payoff. Finally, a vehicle is not an investment, especially, if your loan term exceeds 4-5 years. In this case the value of the car will depreciate faster than you can payoff the loan.

Leasing (Pros)
In simple terms, leasing provides the opportunity for people to drive a more expensive car than they could if they were buying the same car with a standard car loan. That alone makes a lot of people say, sign me up! Not only that, but they can trade their car for a new one at the end of the lease period for the same monthly payment. How is cool is that? Also, if there are any issues mechanically the car (for the most part) will be under the manufacturer’s warranty. Lastly, you don’t have to sell or trade in the vehicle when you’re ready for another, simple turn it in at the end of the lease term and that’s it!

Leasing (Cons)
For starters, almost all leasing programs have mileage limits, which is typically 10,000 to 12,000, maybe (if your lucky)15,000 a year. If you do the math, the average would calculate to roughly 32 miles a day. So, for all you commuters, this may not be the program for you. Unless, you don’t mind paying per mile for going over your miles. Also, at the end of the leasing term, you do not own the vehicle. I know for some people, they can’t comprehend the fact of paying hundreds of dollars every month for 3-4 years, then giving the car back. I guess it all depends on your life style and what fits your individual need.

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