Whenever you are looking to get a new car, one of the things that you will need to determine is whether or not you want to buy or lease one. While both options are suitable for any consumer, there are some key differences that one should be aware of when deciding how they want to get a new vehicle. Both options have their unique advantages and disadvantages. With these in mind, you will be able to determine whether buying or leasing a car is right for you.
1. Know How Much You Can Afford
The first step in determining whether or not you want to buy or lease a car is to see how much you can afford. Leasing a car is usually less expensive because you need less money down upfront and will likely have lower monthly payments. If you decide to buy a new car, you can use your current vehicle as a downpayment through a trade-in. In either scenario, it is important to know your budget for upfront costs and monthly payments before getting a car through either a lease or a purchase.
2. Determine if You Want Equity
Another factor to evaluate when deciding to buy or lease a car is whether or not you want to have equity. When you lease a car, you don’t maintain any equity. Instead, you just turn the car to the dealership and lease the newest model. Whenever you buy a new car, you keep the equity after you pay off the loan. So if you are looking to have any residual value on the car you get, it is better to buy a car.
3. Find Out if You Want to Change Cars
When looking to determine whether or not you want to buy or lease a car, you will also want to find out if you want to change vehicles on a regular basis. With a car lease, you can get a new vehicle every 3 or 4 years. While you can do the same thing with a car you buy, you will still be liable for the remaining loan balance. In order to minimize the costs of your next car, leasing is the better option if you are looking to get a new car more often.
4. Know How Many Miles You Drive
Anytime you decide to get a new car, one of the things that you will want to consider is the number of miles you plan to drive. When leasing a car, there are mileage restrictions. With a lease, are allowed to drive the car for only 12,000 miles per year. If you buy a car, there is no limit on the number of miles you can drive each year. Consumers who prefer to avoid any mileage restrictions will benefit more by purchasing a car rather than leasing it.
5. Find Out Which Car You Want to Get
During the process of getting a new car, it is important to know which particular make and model you want to buy or lease. Some of the most expensive cars may be quite costly and leasing may be the better option. If you have trade-in value and can avoid a costly down payment, you will be able to buy any car more easily. Depending on the exact vehicle you want to get, you will be able to find out if it is better to buy or lease it.