fbpx
The choice between buying and leasing has often been a tough call. On one hand, buying involves higher monthly costs, but you own something in the end. On the other, a lease has lower monthly payments, but you get into a cycle where you never stop paying for a vehicle.
 
One of the advantages of leasing a car is that once the lease is up, you’re free to walk away. You’ll have to drop the vehicle off and sign some paperwork, but, from there, you’re free to move on and purchase a new car.
 
But what if you don’t want to walk away from your current car? You love the car you have and don’t feel like shopping for a new one. Does it make financial sense to buy your leased car?  
 
I’ll give you the major pros and cons for each side of the lease vs. buy debate. And tell you what you need to know about how to lease cars, so you’ll be able to decide which option is right for you.
 

Pros and Cons of Leasing a Car

Whether you choose to buy or lease your next car depends on your goals, budget, and personal preferences.
 
Both buying and leasing cars have their benefits; the key is determining which of those benefits matter the most to you
 
Before you begin your search for your next car, you should take time to decide what you want to get out of it. What terms you’re comfortable with. And the financial implications, letting those factors drive your decision.
Benefits of Leasing a Car
  • Lower monthly payments
  • Fewer repair expenses
  • Option for a new car every 2–4 years
  • No loan approval required
 
  • Lower monthly payments. The cost to lease a car is typically much lower than to buy one. Little or no down payment is required, and you don’t have to pay any upfront sales tax. However, when you return a leased vehicle, you may have extra charges for racking up mileage that exceeds the allowable limit, terminating a lease early, or having any unrepaired damage.
 
  • Fewer repair expenses. If you’re covered by a manufacturer warranty during your lease term, you never have to worry about getting hit with a large, unexpected repair bill. However, you are still responsible for regular upkeep, maintenance, and the minimum amount of auto insurance .
 
  • Driving a new car more often. If you lease a new vehicle every few years, you will always have the benefit of driving a car with the most up-to-date technology, comfort, and safety features.
 
  • No loan approval required. If you have less than stellar credit, you may not be approved for a car loan–or you’ll have to pay an outrageous amount of interest. Leasing companies typically aren’t as strict as lenders because they can easily take back the vehicle if you don’t make payments or if you violate any lease term.

Cons of Leasing a Car

  • Stable and predictable income necessary
  • Mileage limits
  • Likely to pay more over time
 
  • Stable and predictable income. Making monthly payments throughout the life of your lease requires a stable and predictable source of income. When you have a lease, it is harder to get out of the contract than it might be to sell a used vehicle.
 
  • Mileage limits. Car leases typically have a stated (but negotiable) maximum number of miles that the lessee can drive the vehicle per year, known as the mileage allowance.. If you do decide to take on the responsibility of a lease, make sure you read the fine print.
 
  • Likely to pay more over time. Although a lease has a lot of great perks, you’ll often pay more in the long run for a comparable vehicle if you lease it rather than buying it. Leases can also come with many fees and penalties. Upfront fees may include down payment, security, and license fees. Penalties may include default charges for late payments, fees for ending the lease before the agreed-to period, and wear-and-tear charges
You know you deserve more, right?Sometimes, you just need help to reach it.

You need guidance and world-class advice to reach the next levels of success, joy, and abundance.  Every month, I go live online and coach and train our community on how to reach success and better manage their money.

This is your time. If not now then when? If not this, then what?

Join Monthly Coaching NOW!

Pros and Cons of Buying a Car

The difference between leasing a car and financing a car is that with financing, you are purchasing the vehicle. You will still make monthly payments, but at the end of the term, you’ll own the car.
 
Buying Pros
  • Car ownership
  • Freedom to customize the vehicle
  • No end-of-lease charges
 
  • Car Ownership Each payment goes toward owning your car outright. Most car loan terms are 4-6 years. After paying off your loan, you can choose between driving the car without payments, trading it in for a new model, or selling the vehicle. If you take good care of the vehicle, the resale value can help you recoup some of your expenses.
 
  • Freedom to customize the vehicle. The ability to do whatever you want whenever you want with your vehicle without the fear of additional fees is a great feeling. Even if you have a loan, the car is yours to do with as you wish. When you own your car, you can drive as much as you want and customize to your heart’s content.
 
  • No end-of-lease charges. You can also drive as many miles as you want without worrying about penalties. There also are no wear-and-tear fees when your loan runs out, as there often are with leases.
Drawbacks to Buying
With a loan, you’re paying for the full value of the car over a few years, which means your monthly payments usually are higher than a lease.
 
As well, excessive mileage and wear and tear will harm your car’s resale value. And you’ll be responsible for trading or selling your used car if you want a different one.
 

In closing

So there you have it. While the decision between owning or leasing a vehicle is not a light one, your decision can be easier once you do the math! So do your research, shop around and run your numbers. You’ll be on your way to driving the perfect car for you soon!

Share This: