Buying Versus Leasing A Vehicle

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If you are considering a new vehicle in addition to deciding what type car or truck you want you need to decide if you want to purchase your vehicle or lease it.

Whether you decide to lease or buy depends largely on your lifestyle.

Is it important to you to have a new ride every few years?  If so, a lease may be better.  If you prefer to keep your vehicle for a long time then it may be better to purchase it.

You may be able to drive a fancier more expensive model vehicle by leasing than you could afford to buy.

The down payment for a lease is usually less than the down payment for a purchase.

The warranty on the vehicle will likely be in effect during the entire time of your lease so you should not have major repair costs.

When you purchase a vehicle you are paying for the entire cost of that vehicle not just for the vehicle’s use.  Usually the payments for a vehicle purchase are more each month than the lease payment.  However, the payments for a vehicle purchase end and  you will then own the vehicle.  At that time you can keep your vehicle, sell it or trade it in for a newer model.

With a lease the vehicle is returned to the dealer in the end and you need to either lease or purchase another ride.

Lease-vs-Buy

If you drive long distances or if you are prone to scratching or denting a car then a lease probably is not right for you.  Usually leases allow a certain number of miles each year.  When you exceed this mileage you are charged an additional amount per mile and this may run into a good amount of money.

If you have excessive wear and tear on the vehicle when you return it you likely will be subject to additional fees.

If your leased vehicle is wrecked and the insurance company does not pay as much as you owe the lease company you may wind up paying for a vehicle you cannot use.  You may be wise to purchase GAP (Guaranteed Auto Protection) Insurance which can cover the difference between the cash value and the remainder due on the lease contract.  Some car leases include the GAP protections so be sure to check.

Make sure you read the fine print and understand what you are signing if you lease a car.  Is it an open ended lease which has the option to purchase the vehicle at the end of the lease.  A closed end lease does not give you the option of keeping the car.

If you need to terminate your lease agreement early you may have to pay a substantial fee for the termination.

More and more people are choosing the option of leasing a vehicle rather than purchasing one.  There really is no right or wrong answer to the question of whether to buy or lease.  You will need to consider the pros and cons of either option and decide which one best fits your lifestyle and budget.