Whether you have narrowed down your vehicle search, or have just started your consultation with your auto broker, one decision you will have to make during the car buying process is whether leasing the vehicle or buying the vehicle would be the better option. There is no definitive answer as to whether buying or leasing is better. The best option will likely depend on your vehicle needs, financial situation, and future plans. Here’s what to consider when deciding is it better to buy or lease a car.
What to Know Before Deciding Is It Better to Buy or Lease a Car
Below are a few pros and cons to consider that may affect your decision in whether to lease or buy a car.
You’re a High Mileage Driver
If you plan to drive the car long distances regularly or use it for multiple road trips throughout the year, you are likely to accrue a significant number of miles.
Since vehicle leases are based on depreciated value, you will be allowed a certain number of miles throughout the duration of your loan. Going over mileage can be costly at the end of a lease, so buying the vehicle may be the better option if you feel you won’t be able to stay within the allotted mileage.
However, if fees associated with extra miles aren’t a significant concern, leasing offers some great advantages. Working with a broker will help you better understand your mileage agreement and put you in the best position to make an informed decision.
You Like the Latest Tech and Features
When comparing the options of leasing or buying, another consideration is how important having the latest features on a vehicle is to you.
If you are a driver that likes to have the latest in technology, convenience, and safety features, then leasing is likely the better option. By leasing a car, you will be able to get a new vehicle every few years, which will allow you to enjoy the latest features released. Purchasing a car will often lock you into a longer-term loan. So if you don’t want to sell the vehicle, technology upgrades will be less frequent.
You’re Rough on Your Vehicle
Before you decide whether to lease or buy, you should also make an honest assessment of how much wear you put on your vehicle. At the end of a lease, your vehicle will be closely inspected.
While dealerships expect some normal wear and tear during the time you use the vehicle, anything considered in excess will incur extra costs at the end of your lease. If you drive your car on rough roads where you are likely to get dents or scratches or carry tools and cargo in your interior that can tear and damage fabric, it may be best to buy your car instead of a lease.
You Need a Low Monthly Payment
If monthly payments are one of your top concerns, lease payments will be less than loan payments. Your monthly lease payment will be based on the vehicle’s depreciated value for the length of the lease and the mileage limit selected. This means your payments will total a much smaller amount.
In addition to this, sales tax will only be charged on the monthly payment amount instead of the car’s total value. When signing your lease paperwork, look at the total cost of the car, the amount it will be worth at the end of the lease based on the Kelley Blue Book value, and the difference in the amount will be what you pay during the term of the lease plus fees, interest, and taxes.
An auto broker will help facilitate the process with the leasing company so you have full transparency into both financial options.
Your Credit is an Issue
Your financial situation will also play a role in whether you should lease or buy. One thing to consider is whether you are using the vehicle to build your credit. A lease payment can boost your credit by showing on-time payments for a short-term loan, but an auto loan can give you a long-term loan payment history.
Credit scores have a major effect on the interest rate you can get on a car loan and determine whether you qualify for a lease. If you currently have poor credit, you may have difficulty securing a lease, and a car loan may be your only option.
It is also important to consider possible credit issues in the future if you expect one. For example, if you have good credit now but expect a dip in a few years, possibly by starting a business or moving into a new home, you may want to get a car loan now when you can secure a low interest rate, instead of worrying about possibly paying a higher one when it comes time to trade in your vehicle at the end of the lease term.
You Are Planning a Major Life Change
A car loan term is considerably longer than a lease term, which means you commit to a longer period of time with the vehicle when you buy your car. While it is possible to sell your vehicle before the expiration of the loan term, you will likely not be able to build equity in the vehicle until you have paid off the loan unless you put on minimal mileage.
So if you expect a major life change, such as growing your family or children going off to school, and anticipate a vehicle change within a few years, it may be more ideal to get a two or three-year lease.
You Don’t Want to Deal With Repairs
The monthly costs associated with vehicle repairs should also be considered when deciding whether to lease or buy. With a lease, you will only be responsible for wear and tear maintenance on your vehicles, such as oil changes, belts, tires, and brake pads. In some cases, your dealership may offer some free oil changes with your lease. Aside from that, all other repairs will be covered at the dealership, because most leases don’t exceed the factory warranty. When you buy a car, the factory warranty will cover certain repairs for a specific period of time, after which you will be responsible for repair costs.
So Is It Better to Buy or Lease a Car? – The Best Decision You Can Make is to Work with An Auto Broker
There are many things to consider when determining is it better to buy or lease a car. That is just one of the ways an auto broker can help. Talk with us about your financial situation, concerns, wants, and needs, and we’ll provide you with the information you need to make the best decision for your lifestyle and finances.
From start to finish, we will walk you through the car-buying or leasing process, helping you to find the right vehicle at a price that works with your budget.
Ready to get started? Contact AutoSearch today and shop our inventory of over 300,000 cars to find the vehicle that perfectly fits your goals and needs.