It’s a tough question for many of us. Do we want to lease … or do we want to buy? It’s a bit more complicated than you might at first think, as well. Here are a few questions to ask yourself when figuring out whether you should rent or own your next car.
How Much Do You Drive?
If you buy a car, you can drive it all you want without worrying about it. Leases, though, have limits on how many miles you can drive your car in a single year during the lease period. Usually, though, the lease ranges are quite generous, between 12,000 and 15,000 miles per year. Those limits are only in place to ensure that if you return the lease, the dealership has a used car without too many miles on it.
Granted, few of us rack up a thousand miles a month on our cars, but if you drive quite a bit, it might make sense to work out the math and see how much you actually travel. If you can’t stay below a limit that fits your budget for a lease, buying is a better option. But if you can lease, and many of us can, it might be easier on your wallet.
Do You Want To Modify Your Car?
If you need to add equipment to any car you own for work purposes, to help family members with disabilities travel, or other needs, buying is likely the way you’ll need to go. Because a lease is designed to return a used car they can sell to the dealership, most require you to remove any custom equipment you install on the car, and will charge you for any damage above normal wear and tear that equipment causes.
How Low Do You Need Your Monthly Payments?
Since you’re technically renting the car from the manufacturer, a lease has a lower monthly payment than buying a car outright. It’s like renting an apartment; you’re just paying the rent, plus some taxes and a few fees included in your payment to keep your lease up and running. If you need to keep your payments low, or just want to keep as much room in your budget as possible, a lease will likely be the better deal.
If, on the other hand, you’ve got the room in your budget and want to own, buying is definitely the best option.
How Long Do You Want To Keep The Car?
Another question is how long you intend to keep this vehicle around. If you’re getting a car with the intentional of simply turning it in as a trade-in to buy a new one right after you loan is up, you should lease. Leasing is cheaper and will allow you to turn in your car at the end of the lease with minimal effort and cost.
If you want to keep your car around for a long time, though, buying is the only way to go. Once the loan is finished, the car is yours and you can drive it to your heart’s content.
Before committing to any sort of payment plan, be it a car loan or a lease agreement, carefully evaluate what you need out of a car. More often than not, what you need will be crystal clear.