By Madeline Klein
Shopping for a new car, or a new-to-you car can be quite the hassle. You’ve got the online research, test driving your favorite options, and then bargaining with a master salesperson for the price you refuse to go above.
And as if that all wasn’t enough, you’ll have to make a choice between buying and leasing a car. Since we can’t go to the dealership with you to haggle your best deal, we’re laying out some details here to help you decide: is it better to lease or buy?
Advantages of leasing a car
Leasing has become more and more popular over the past years. Nowadays, about three in 10 new cars that leave dealer lots are leased. There are some big benefits to think about that will help you decide if you should lease a car.
A big advantage to leasing is getting the latest technology. As we all know, technology ages quickly. What is state-of-the-art one year is soon out of date. Just check out my 2006 Acura, and it’s lack of a touchscreen dashboard. When you buy, you’re then stuck with that old navigation system and clunky looking dashboard for years and years. But leasing allows you to drive a car for a couple of years and then switch it out for the newer model for your next contract. Say hello to the best nav system and coolest new technology every couple of years!
Basically, leasing means you are only paying for the value your car loses while you have it. So, you can get away with lower monthly payments when you go this route. A lot of times you can get a nicer car with better features for the same monthly payments that you’d have if you bought a car.
While your monthly payments are lower, don’t forget there are some other costs with leasing, like fees and interest. There’s typically a down payment and potentially some costs at the end of your lease. Make sure you know exactly what you’ll be responsible for before making your decision based on the monthly cost.
There’s nothing like that drop of your stomach when you take your car in for a simple oil change, and the shop finds hundreds of dollars of other maintenance needs. When you lease a new car, you can avoid most maintenance costs. Typically you’ll have a manufacturer’s warranty covering a lot of repairs. Your dealer should take care of any issues and let you leave the repair shop with a smile on your face and cash in your pocket.
The benefits of buying
Buying a car, whether it’s purchasing a new or used one, can be the way to go for some people. It can be a great feeling to know the car will be all yours once you’ve paid it off. If that’s not enticing enough, we’ve got some other benefits here to consider before deciding to buy or lease a ride.
Customizing your ride
When you buy a car, you can shop for exactly what you want. You can customize new vehicles to fit your wants and needs. Like how we know you really need that panoramic sunroof. We get it. We really do.
And if you’re looking at a used car, you can shop until you find that perfect color with the perfect features. You’re a bit more limited in the leasing department, depending on what’s available with your dealer.
That trade-in cash
Sure, your monthly payments may be a little more when you buy, but that money is all going towards paying off your car. One day that new ride of yours will be all yours, and you’ll get to experience that blissful time of no car payments. Truly, there’s nothing better. We’re thinking Starbucks every day, and guilt-free none the less.
Not only do you get that time without a car payment, but you’ll be building equity in your car. When you do go to get another car, you’ll be able to trade your old one in for some dough and put that money toward a new ride. And with these tips to get the best price for your trade-in, you’ll be a bartering master who can get the most out of their car.
When you lease a car, you’re limited on the number of miles you drive. If you typically just drive to and from work, you may not have an issue. But if you like to go wherever you want whenever you want, the limited miles could be restricting. Buying means you don’t have to say no to that road trip to one of these must-see destinations or to that out of town Taylor Swift concert you’ve been dying to go to.
Should you lease or buy a car?
There are pros and cons to leasing or buying a car, so be sure to consider your lifestyle when you are deciding between the two. If you’re a tech-junkie who doesn’t drive much, leasing may be for you. However, if you’re a family of four who goes on a couple of road trips every year, buying may be the better move because of the unlimited mileage.
After you’ve looked into what works for your lifestyle, check out the financial side of things to see what option comes out ahead. There are tools, like this one from Bankrate, that helps you calculate what makes the most sense for your financial situation.
Buying or leasing a car is a big decision. No matter what you choose, there’s going to be nothing quite like that feeling of driving off the lot with your new ride. So get those sunglasses out, put on your favorite tune and enjoy it!
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Posted November 22, 2019 in Street Smarts.