Is it Smarter to Buy or Lease a Car?
You are in the market for a new vehicle. Looking around these days, you might notice that a new car is still going to cost a pretty penny. Then you see advertisements for a seemingly less expensive option of leasing a car. It’s the perfect one and you want it really bad. So the question is, is it smarter to buy or lease a car?
Leases come with plenty of benefits. The up-front out of pocket expenses are generally lower. It is also generally easier to get a lease than an auto loan. Plus the low down-payment is added to the benefit of lower maintenance costs.
However, there are extra expenses involved. Insurance rates are often higher for leased vehicles because you don’t actually own the car. Another out of pocket fee steps in when you trade the car in for a new lease. The usual lease lasts about three years, and depending on the number of miles and the potential damages and depreciation of the car, you may find yourself paying a lot of fees. Add that to the fees to begin the next lease, and that’s a chunk of change.
When you own a vehicle, you pay more up-front. Plus the monthly payments for the years afterwards can really add up. On top of that, the years of wear on the car will result in maintenance costs and depreciation. After ten years, you may have the car paid off, but more will need to be done to keep it running.
On the upside, owning a car and driving it for an extended time means that you are building equity. Insurance rates go down and you still have the option of getting a decent trade-in value for the car when you decide it’s time. Leasing, on the other hand, builds no equity. Insurance rates remain high and there is no trade in value when you switch cars. A car you bought may have cost you more than double it’s original price by the time you trade it in, but the same car if leased without any extra penalties or costs during that same period of time could cost up to three times more than it’s original worth.
The benefits of leasing fit a lifestyle that accommodates changing cars every few years, especially if there is a high priority on having a car that needs little mechanical work done. Buying, in the end costs less money overall. Whichever option you choose, stop in at Palmen Fiat of Kenosha, WI today to choose the right car with the help of our professional staff.
