It can be difficult to decide whether to buy or lease a car. In this case, there is no correct decision. The choice that is likely to work best for you depends completely on your circumstances. Here are some of the things you should keep in mind.
If you buy a car and keep up with any loan payments, you own it and can keep it indefinitely. However, if you lease a car, you do not own it and you will have to return it when your agreed lease term ends.
If you own the car, you can sell it at your convenience. If you still have a loan balance associated with the car, money from a sale may be used to pay the loan balance off. If you lease a car, on the other hand, early termination fees are very common and tend to be very expensive.
In terms of up-front costs, buying a car is far more expensive than leasing. If you look at monthly payments, people who buy a car tend to pay more than people who lease a car.
Leasing can often prove more expensive compared to buying a car in the long term. This is because it is always necessary to pay to lease the car. If you buy a car, you do not have to pay anything further if you put down the full purchase price or after you pay off your loan. If you are leasing, on the other hand, you will have to make regular payments indefinitely.
If the car belongs to you, there are no costs associated with driving more, besides expenses associated with gas and maintenance. Yet if you lease the car, it is common to limit the number of miles you can drive during the lease term without incurring a penalty. If you drive further, the charges can be high.
Think about your priorities to decide whether buying or leasing might be a better fit for you. If you want to keep your up-front costs as low as possible, leasing might be a better option. If you would like to save as much money as you can in the long term, buying might be a better choice.
- Installment Loans for Bad Credit
- What Goes Into Your Credit Score?
- What Happens If I Can’t Make My Car Payments?
- Consolidating Debt
- What Happens to Your Auto Loans When You File for Bankruptcy?