Deciding whether to buy or lease a car can be a tough choice. There are benefits to both options depending on your needs and expectations. Let’s take a look at some of the main arguments in favor of leasing or purchasing.
Leasing Usually Offers Lower Monthly Payments
Leasing a car may be the ideal option if you want to keep monthly costs down. When you buy a vehicle, your monthly payments consist of a portion of its overall value, plus interest on your auto loan. However, if you lease a vehicle, you’re only paying for the amount it depreciates in value during the lease period, which may be one, two, or three years.
Buying Allows You to Build Equity
If you take out a loan to buy your car, you build equity in the vehicle with every monthly payment. This means that you gradually build up the amount you own. This is beneficial if you want to trade in your car prior to the end of the loan. Since it’s yours to sell, you can use the cash you make from the sale to pay off the remainder of the loan. Alternatively, you may be able to roll the outstanding payments into a new loan for a new vehicle.
Leasing Reduces Your Responsibilities for Maintenance and Repairs
Because you don’t own a leased vehicle, the dealer is responsible for performing scheduled maintenance during the lease period. You’ll be driving the car when it’s less likely to need repairs, since leased vehicles are almost always new. Once the lease ends, all you need to do is bring it back to the dealer.
Buying Allows You to Do What You Want With Your Vehicle
Once you purchase a vehicle, it’s yours to do what you want with. You can drive as many miles as you want during the year and take it off-road, and you don’t have to worry about damage caused by kids or pets. By contrast, lease agreements typically include mileage restrictions. If you drive above the mileage limit, you’ll likely have to pay an additional charge. And when the lease ends, the dealer can impose additional charges if they think the vehicle has been damaged beyond the usually expected wear and tear.
Leasing Enables You to Drive High-End Vehicles
Because you’re only paying for vehicle depreciation during the lease, you may be able to choose a vehicle that would otherwise be unaffordable. Since leases expire every few years, you can also get the best years out of a high-end model before moving on to another new car without having to worry about the cost of repairing worn-out parts. At the same time, you’ll gain access to the best technology as it becomes available, including potentially life-saving safety equipment that is often too expensive for many consumers to buy.
Buying Gives You More Security Over the Long-Term
It’s relatively easy to sell a car if you find that you’re no longer satisfied with it. Even if you haven’t repaid your loan in full, you may be able to take advantage of a trade-in program through your dealer, or you could find a buyer in the private marketplace who wants to benefit from the more affordable option of purchasing a used car. By contrast, getting out of a lease can be expensive. Some dealers impose early termination charges that can end up costing almost as much as if you had continued paying the lease to the end.
Leasing Means You Pay Lower Taxes
The sales tax and other charges associated with leasing a vehicle are typically lower than if you buy it. You’ll likely have to make a down payment at the beginning and pay a registration fee. However, this payment is generally lower than what you’d have to shell out to get a good auto loan.
Buying Is Better Value for Money Over the Long-Term
While charges and related costs may be higher initially, you benefit from actually owning the vehicle when the loan payments end. For example, say you take out a five-year car loan and pay it off. If you run your vehicle for eight years before trading it in, you’ll have three years where you’re not making any monthly payments.
Contrast that to someone leasing two or three cars over an eight-year period. They’ll have to make monthly payments throughout that time. Although they may be lower, the leasee will end up paying more in total and will be left with no equity in any of the vehicles they drove.
Leasing Gives You Warranty Coverage at All Times
The advantage here is that if anything goes wrong with your car, you can get it repaired at no extra charge. By contrast, someone who buys a car will have to check the terms of their warranty to find out if they are still covered after a certain period of time.
Buying Allows You to Customize Your Ride
Once you’ve secured finance to pay for a vehicle, you can select from a wide range of trims and additional features to suit your taste. These choices can include everything from the type of engine in the vehicle to the speakers in your sound system and the size and style of wheels. If you lease, however, you have to take the vehicle as it is because you don’t own it. Throughout the lease, you have to keep it in showroom condition, meaning you can’t make any alterations.
So, there you have it! We’ve given you the rundown on the pros and cons of leasing and buying a vehicle. As you’ve seen, it’s not possible to give a definitive answer about what the best option is for all situations. Each person will have their own view depending on what their needs are. If you’re looking for advice or have questions about our financing options, the team at Huffines Kia Mickinney is here to help! Whether you decide to purchase or lease, we’ll get you on the road with your new Kia.
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