Should You Lease of Purchase a Car

January 16, 2018
If you need your own transportation, then you will be confronted with one major choice: should you purchase your car or lease it. There are pros and cons to both of these choices. Which option is better for you? Let’s take a closer look and see.
Should You Lease of Purchase a Car

Why lease?

First of all, you should consider the monthly payments. In general, leased cars have lower monthly payments compared to new cars that you purchase outright. This is because you are basically covering the cost of the car’s depreciation when you lease, but when you buy, you are covering the entire cost of the car. This could also mean that the lease requires a lower down payment.

Lease terms generally only last for three years (though there are shorter and longer terms in some cases). This means that the car will still be relatively new while you are driving it, and you will not have to worry about major repairs in most cases. After three years, you will likely return the car to the dealer and lease a new one.

What about buying?

If you want to purchase a car, you may have to put up with a larger down payment and slightly higher monthly payments. The major difference is that once you are done paying off the car loan, you will own the car and will not have to make any payments for the rest of its lifespan. If you lease, you will always have a monthly payment.

Also, you can be free to resell your car after you have paid off the loan. This means you could potentially get some money to put as a down payment on a new car. Some dealers offer “trade in” deals where you can get a discount on a new car when you trade your old one back to them.

The one drawback to this, of course, is that as your car ages, the more likely it becomes that it will need expensive repairs. This is not a guarantee, but if you are purchasing a new car you should research its reliability before buying. 

Buying a cheaper used car

What if you want to purchase a car but you do not have the cash on hand. Perhaps you could get a loan. But what if you are purchasing a cheaper used car and you are only short a few hundred dollars. If you can get by without getting a large auto loan, then that is a good thing. Perhaps you could get an online personal loan to cover the cost of buying a used car. These loans are easy to apply for and they are not tied to your car. This means you can get the money in your bank account and then pay cash for the car.