We all know that leasing has its share of advantages, but so does buying. When you lease a car, you can benefit from lower monthly payments, especially if the vehicle you lease has a high or good residual value, which means that it won’t depreciate as much over time. And, at the end of the term, you will not have to worry about the depreciation of the vehicle, and you can bring it back to the provider. When you buy a car, the biggest advantage is that you own the vehicle at the end of your payment term, and you can do with it what you want. But since cars depreciate, if you decide to sell your car, you will end up having to sell it for a much smaller amount than when you bought it. So, should you lease a car or buy a car? Here’s how to know what’s the best choice for you.
Consider your history
Do you tend to keep a car for a long time? If you tend to use vehicles for five years or more, then you may be better off buying a car. But if you like to drive the latest car models after only a few years, then you may be better of leasing, since it’s the cheaper option and it is easier than buying a car and trading it in after several years.
Estimate what you can afford
You have to have an estimate of what you can afford. Traditionally, buying a car is more expensive than leasing when it comes to monthly payments, so you have to make sure you have the budget for it. You also have to have a significant deposit when you buy a car, but when you lease a car, the deposit is usually just three months’ worth of the car’s monthly fees. Also, it’s now easier to find the cheapest lease deals around, such as online, which can give you even better value for money.
Assess your mileage
You also have to assess the mileage you will probably have to put on the car while you drive it over the next few years. You should figure in the mileage when you make your calculation for the total cost of a lease. If you estimate your mileage to be low, then you’re better off leasing.
Determine the car’s purpose
Leasing may also be a better option if you are planning to use the car for your business. If you are planning to entertain your customers or clients, for example, car leasing will allow you to drive around in a nice car, which will, in turn, impress your clients. You don’t have to pay as much money for a nice car when you lease it as opposed to buying it. Also, when you lease a vehicle for business purposes, it can give you a good write-off on your taxes.
Consider maintenance and repair
When you buy a car, you also have to think about its maintenance and repair if ever the car breaks down, which will be more often after the first three years. But if you lease, the maintenance of the vehicle will usually be under warranty, and you don’t have to worry about the additional costs and expenses of repairs.