The Clash of the Cars – To Lease or To Buy?

So you’re in the market for a car, but are unsure of whether you should lease or buy. Both options have their pros and cons – it really all comes down to your lifestyle and needs. First, it’s important to understand what leasing and buying means. Leasing is a type of financing which allows you to drive a vehicle from a dealership for a set amount of time and miles. You are paying for the use of the vehicle instead of the purchase price. Once the agreed upon time is over, you return the car to the dealership. Buying a car means you retain ownership after all payments are made. Although there is no one-size-fits-all solution when it comes to financing your ride, there are many factors to consider when making a decision that best fits you and your financial picture.

 

Vehicle Types: When you are deciding whether to lease or buy, knowing which type of vehicle you want may sway your decision. More often when leasing, your options are limited to new vehicles. Most leases have a term of two to four years, which means you are more likely to be driving a new or nearly-new car. It also may provide you with the chance to drive a bigger or more deluxe model car than you could afford if buying it outright. If you are looking to get a used, more affordable vehicle, buying may be a better option for you. Whether you are planning to pay cash or finance the vehicle, you are not limited to only a new car, but used as well!

 

Use of Vehicle: How to plan to use your vehicle is a big factor in your decision to lease or buy. Leases generally have a limitation on how many miles you are allowed to drive per year, as well as limits on “excessive wear.” The average lease agreement limits you to 10,000 to 15,000 miles per year, which works great if you live close to work and your daily activities. But if you commute to your job, take road trips or travel often, you may end up paying extra for excessive mileage use fees. If you do drive often or plan to drive far distances, buying would mean you have no limitations on mileage or any additional fees for excessive wear beyond the maintenance of the vehicle.

 

Credit Requirements: If you plan to use financing while getting a new vehicle, auto loans are generally available to consumers across the credit spectrum. Those with a lower credit score may still have financing options available to purchase a vehicle, although it may come with a higher interest rate. Leases tend to be more difficult to qualify for if you have had credit troubles in the past. If you have credit challenges, check out Cutting Edge’s Afford My Ride auto loan program for financing a purchase!

 

Length of Possession: When you purchase a vehicle, you have the option at any time to sell or trade in your car and get another one. This can be beneficial if you realize you need a larger vehicle, or something with better gas mileage. When leasing a car, there are usually fees associated with an early trade-in.

 

Whether you decide to lease or buy a car ultimately depends on your individual circumstances, preferences, and financial goals. Leasing offers lower monthly payments and the ability to drive a new car every few years, while buying provides long-term ownership and potentially greater financial flexibility in the long run. Consider factors such as your driving habits, budget, and future plans before making your decision. Whichever option you choose, understanding the advantages and drawbacks of both leasing and buying will empower you to make the best choice for your automotive needs!