Buying a new car is probably the second most significant purchase in your life, following a house, that is. So, it makes sense to try and make it as easy as possible, but do you know your options? Wondering whether to buy outright or lease?
There is no short answer as both avenues have positives and negatives. If you’d like to find out what’s best for you, continue reading.
So, you’ve probably heard that the greatest benefit of leasing is that you’ll get your hands on a brand spanking new car every few years. This means you no longer have to worry about selling the car; instead, you can just return the keys to your car leasing dealership and walk out with your next flashy motor.
When buying a car you’re probably paying off a personal loan, so you’re effectively building equity – depending on how quickly you’re planning to pay off the loan, that is. Once that money is paid back the car is yours. You own it outright. You’re free to sell it and get some hard cash in return for your trusty motor or buy another car of equal value, negating the need for a loan. Let’s face it, who doesn’t like money?
So, what’s the best route to take?
There’s no clear winner. It’s all down to your personal needs, or what you can afford.
Leasing will often mean lower monthly payments – sometimes this will be because of a hefty deposit, but that depends on the type of car and lease you’re after. You also won’t have to worry about vehicle maintenance or tax, as it’s all taken care of by the leasing company. Some brands also include insurance, so all you have to do is fill it with fuel and away you go!
Mileage is always limited with leasing. You have to select how many miles you’ll be driving a year. If you go over this set mileage limit you’ll be charged on a per mile basis, which is basically a penalty – as the miles rack up, so will the cost. It pays to know roughly how many miles you’re going to be driving.
You’ll also need to treat the car as you would your own. If you return it with dents, scratches and damage to the interior you’ll be charged, so keep this in mind. Wear and tear penalties vary, but the dealership will have to make any repairs to the damage before they sell it on. As you can imagine, it’s never cheap. It pays to be a careful driver.
The decision also firmly depends on how long you want to keep your car. Most people like to have a new car every three years or so, but if you’re the sentimental type and really want a specific car, keeping it for five years or longer won’t be a problem.
Also, if you’re an enthusiast and you’re in a position to buy right, your car may well become an asset once it’s paid off. There are cars out there that actually increase in value over their lifetime, some more than others.
The main difference is that you OWN the vehicle if you buy. It’s your property and you can do whatever the hell you want with it. There are no nasty surprises. Drive 30,000 miles in one year, no problem. Ding it and don’t get it fixed, that’s up to you. There’s nobody else to answer to. There’s no big initial payment and no fines if you don’t take the best care of the vehicle.
If for a second we’re to play devil’s advocate, cars will undoubtedly rack up costly repair bills the older they get. You avoid that problem by leasing as you only own them for three years at the most – and everything will be covered under the manufacturer’s warranty in that time.
Well, there you have it.
Hopefully, this article helped to shed some light on your decision to buy or lease your next car. Whatever the decision, don’t rush into either option before you know where you stand. Ultimately, it’s a personal choice – neither is right or wrong. Remember to weigh up all the positives and negatives before signing on that dotted line to avoid any surprises.