Choosing a car can be one of the largest financial decisions in one’s life, and most Americans spend a large amount of time in their car for commutes and daily errands. There are essentially two options when it comes to choosing a car, leasing or buying. Each has its relevant benefits.
Leasing Has become an excellent option for many people over the years. Traditionally it was an attractive position for two main types of drivers. One, was the business owner, who had the option to write off the lease payments as a business expense if it was needed to operate their business. Two, were those who were in a financial position where leasing made more sense. Car leasing can make more sense because it requires little or no down payment, since a loan is not needed. Whether a recent college graduate, or families with little savings, leasing has been an excellent option without having to save thousands of dollars before applying for a loan. And since no loan is issued for the purchase at one time, the sales taxes are usually not charged at once as well, which allows for even less of an upfront cost. It can also give the chance for the driver to improve their credit score by paying their lease payments on time.
Another obvious benefit is that car available for lease are new or nearly new cars. This means the driver has the comfort of the newest technology and comforts which are founds only in new cars. Since new cars have little or no “wear and tear” the chances of malfunction or breaking down is far lower. Leases are typically for three or four years, and those who change their preferences have the option of changing styles and designs of cars at the end of their lease.
Buying can also be a great option for many drivers. The upfront costs, and high payments does pay off in end since, eventually, the car will be owned. If maintained well, the car can still be in excellent shape after the loan is repaid, and there will no longer be a monthly payment. Since the car will be owned outright, the driver can make any modifications, like repainting the car, changing exhausts, rims, or sound system.
When you purchase a car, there are far less restrictions than leasing. You have more flexibility in choosing an insurance plan and there are no annual mileage limits, which can be quite costly if a leased car is driven over the approved amount. Sometimes leasing companies restrict where you can have repairs and maintenance done as well. If the insurance permits it, it is easier to add additional drivers to coverage on cars which are owned.
There is a greater selection of cars to buy than to lease. If one buys a car only 2-3 years old, most of the depreciation has been absorbed by the first owner, and some great deals can be found. Many consumers feel “car loyalty” so having a consistent car can be huge for some people, and also improve safety since changing cars always require an adjustment people to familiarize oneself with the handling of the car.