Buying or Leasing?
Where Do You Live?
It’s the classic dilemma that faces every auto-consumer out there: Pay cash upfront or forego the ownership and pay monthly settlements instead?
on a set of financial and personal considerations.
First, your finances. Affordability is clearly key, and you need to ask the question of how stable is your job and how healthy is your general financial situation. The short-term monthly-cost of leasing is significantly lower than the monthly payments when buying: you only pay for“the portion” of the vehicle’s cost that you use up during the time you drive it.
If you have a lot of cash upfront, then you can opt to pay the down payment, sales taxes - in cash or rolled into a loan - and the interest rate determined by your loan company. Buying effectively gives you ownership of the car and that feeling of “free driving” that goes on providing transportation.
similar to the interest rate on a financing loan.
However, these benefits have a price: terminating a lease early or defaulting on your monthly lease
car means to you: are you the sort of person to bond with the car or would you rather have the excitement of something new?
If you want to drive a car for more than fives years, negotiate carefully and buy the car you like. If, on the other hand, you don’t like the idea of ownership and prefer to drive a new car every two to three years then you should lease.
Next, take into consideration your transportation needs: How many miles do you drive per year? How well do you drive and maintain your vehicles? If your answer becomes: “I drive 40,000 miles a year and I don’t really care much about my cars as I don’t mind dealing with repair bills,” you are better off buying a vehicle.
Leasing is based on the assumption of limited-mileage, usually no more than 12,000 to 15,000 miles a year, and wear-and-tear considerations.
Unless you can keep within the prescribed mileage limits and keep the car in a good condition at the end of your lease, you might incurhefty end-of-lease costs.
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