Average new vehicle prices continue to surge past $40,000. That’s a rise of over 5% for January 2021.
Do you need a new car? The price tags are daunting these days, but you have options. You can lease or buy.
Are you wondering whether you should lease or buy a car? Read on to learn which option is right for you.
Advantages of Leasing
When you lease a car, you rent it from a dealership for a certain amount of time. During the lease term, you make monthly payments to the dealership based upon the car’s value and the amount of your initial payment.
Lease payments are often lower than car loan payments. If you’re worried about your immediate monthly budget, a lease will give you more wiggle room.
Because of these lower payments, many drivers upgrade their vehicles beyond what they can afford to buy.
Most new cars come with a three-year warranty. Most lease terms last for 36 months. That means when you lease, you’re off the hook for repair costs.
Worry-free repairs are why leasing a car is smart for people with a more compromised financial situation.
There are tax benefits of leasing a car vs. buying a car. If you use your vehicle for business purposes, you can write off both the depreciation and the financing fee included in your monthly payments.
Advantages of Buying
If leases were so great, everyone would do it. Is it better to lease or finance a car? Though leases are on the rise, buying brings the owner many financial benefits.
When you finance a car, you don’t have to surrender it in three years. It’s yours to keep as long as you want.
Owning is the better option for people with mechanical ability. You’re able to get every penny from your investment.
You’re never locked in when you finance a car. You can trade-in at any time. Breaking a lease is much more complicated and costly.
When you ask, should I lease or buy a car, consider your plans. If you think you’ll need to sell sooner, buying is the far better option.
Your new car drops in value as soon as you drive it off the lot. When you finance a car, its cash value is yours.
A car also serves as an asset should you need a loan. With a car title loan, you can get money based on your vehicle’s value. Getting a title loan can come in handy should you experience any unforeseen financial emergency.
Is it Better to Lease or Buy a Car?
The lease vs. buy decision comes down to finances and flexibility. Are you able to afford a pricier loan and repair costs in exchange for equity? Or do you need a lower monthly payment and worry-free maintenance?
To lease or buy a car depends on what you need and what you hope to gain in the future.
Do you need more financial guidance? Check out the rest of our page.