You finally decide to get a new car. It is exciting, right? However, this needs extensive research before settling on your preferred choice. Factors such as pricing are essential. This comes straight down to the idea of whether to lease or buy a car? Well, below are some points to consider when leasing a car.
Advantages
1. Lower monthly payments
Usually, when you decide to go the leasing way, you find that the monthly payments will be lower than those of buying a car. The contract may require you to have a down payment or not.
2. Paying less for a better model
Something that makes leasing interesting is the fact that you can drive a better model than when buying a car. As long as you have a budget of what you’d be comfortable paying, you will be surprised at the many incredible options you have. In comparisom, when buying, you may have to settle for a ‘lesser’ car due to finances.
3. Having options
When it comes to leasing, once your lease ends, you can always renew and get a better car with the latest technology. As such, you can stay updated as the years go by. Unlike buying a car, your only option would be selling it or considering a trade in.
4. Minimal costs
Leasing is a bit cost efficient when looking at maintenance costs. This is the case especially if your lease contract caters for basic maintenance. As such, you find that the only expense you incur on the car is on insurance and the monthly stated payments. When purchasing a vehicle, you may need to take a loan for it which could be costly. You may not even qualify to receive the loan due to your credit history. However, you may have the option of applying for credit builder loans that help you build up your credit rating. You can get more information at https://aaacreditguide.com/credit-builder-loans/.
5. The tax question
Leasing a new car has a positive side when it comes to paying tax. You may end up paying significantly lower taxes depending on your state. However, run this through a tax expert and know the treatment of leased cars in your area.
Disadvantages
1. Restricted mileage
Once you decide to lease, the contract will state how many miles per year the firm allows. In case you exceed your annual limit, you pay high mileage charges which could take a toll on you.
2. Wear and tear fees
It’s almost impossible for a car not to have any wear and tear. However, leasing has minimal room for wear tear. If the vehicle is not maintained as agreed, you end up paying hefty fees once your lease period is over. Also, the car needs to come in as it initially was with minimal to no changes of the general look.
3. Pay more in the long run
You end up spending more funds in the long run. This is because you never stop paying unless you decide to terminate the contract and purchase a car. Buying saves because once you complete your payments, you gain full ownership of the car. A point to note, however, is that once your contract comes to an end, you can always decide to buy and retain the vehicle.
Leasing is a personal decision for people. In case you opt to lease or buy a car, it’s important to understand the pros and cons. This helps you in making a conscious decision on what next step to take.
