Buying a car of your choice is an important financial decision, as it impacts other money-related areas of your life. A lot of people who cannot buy a car with cash are often in a quandary as to whether they should buy the car with a loan or lease it for a few years. The choice between leasing a car and buying is often a difficult one to make, as it depends on a number of variables, such as how long you wish to keep the car, the kind of car you wish to buy and so on. Only after a careful analysis of all the factors, can you take a judicious decision regarding buying or leasing a car.
To decide which is a better option out of buying or leasing a car, let’s take a look at the pros and cons of both the options:
Leasing: Is It A Smart Decision?
According to Crediful, (https://crediful.com/leasing-vs-buying-a-car), the best part about leasing a car is that you can lease a more expensive car than if you were to buy it. You need to pay less of a down payment which includes the first month’s payment, a refundable security deposit, registration fee and other taxes. The lease payments are always less than the loan amounts as you pay only for the depreciation amount during the lease years. At the end of the lease years, you need to just return the car, pay the end of lease fees if there are any and walk away. All this seems to make leasing a car look like an attractive option.
However, leasing a car comes with its own set of negatives. If you end the lease early, the early termination charges can be a lot. Most leases also limit the number of miles that you can drive. You will have to pay additional charges for exceeding a set number of miles. Most leases hold you responsible for the excessive wear and tear of the car and you will need to pay charges for it.
Buying: Is It A Wiser Choice
Buying a car saves money over time, as you have the trade in value when selling the car to put towards the purchase of a newer car. You also have more flexibility in the use of the car, so that you can modify the car if you want to. Also, you don’t have to worry about the miles driven or the wear and tear of the car.
The disadvantages of buying a car are that you have to make a higher down payment, make higher monthly payments as compared to leasing the car and are also responsible for the repair costs once the warranty of the car end.
What Works Best For You?
End of the day, It’s a personal decision to buy or to lease a car but here are the three things to consider before taking the decision.
– Consider your credit,
– Consider your cash,
– Consider your long term plans for the car.
Never be in a hurry in making the choice between buying and purchasing. Give yourself enough time to evaluate both the options and take the decision that ensures that you are putting your money in the right place.