Buying VS Leasing A Car

Buying VS Leasing A Car
by Takara Alexis

Most car shoppers usually do not think twice about if they are going to buy or lease a car. A great deal of them automatically chose to purchase a car because leasing seems so expensive. But, there are some times when leasing makes sense.

When you lease a car, you enter an agreement with the leasing agent to keep the car for a minimum of six months and pay a monthly lease payment. You can discuss the lease price the same way you would if you were buying the car. In fact, you should negotiate the price, but be careful that a price reduction doesn't result in increased prices elsewhere in the lease agreement.

People have the notion that when you lease a car it is more costly than when you buy one, when it fact that's not always the case. Buying a car is only cheaper if you keep the car long after it's been paid off. However, if you're like many people, and trade your car in before it's paid off, you're losing money. If you're only going to keep a car for a few years, leasing it is a better option.

The monthly payments on a car lease are also anywhere from 30% to 60% lower than monthly payments on a car loan. So, you save money on leasing a car, if you do it for a few years. But that's only if you would have traded in a purchased vehicle after the same length of time. If you plan to keep your car for a long time, it's cheaper to buy a car. For example, it's cheaper purchase a car and keep it for 10 years than it is to lease a car for 10 years.

One of the drawbacks of leasing a car is the audit process it goes through when you turn it in. The lease agent will go over the vehicle with a fine-toothed comb to look over the damages done to the car. You'll have to pay extra fees for anything more than"normal wear and tear" which might include things like miles over the allowance and too much scratches on the car.

When the lease is over you don't have any car payments, but you also don't have anything to drive unless you decide to buy the leased car or another one.

Deciding whether to purchase or lease a car is not only about price. You should also consider your personal lifestyle in the choice.

You should choose car buying over leasing when: You can afford bigger payments each month, you prefer to drive your car for a long time, you can afford to pay for repairs once the warranty is up, you drive more than 15,000 miles per year, you want to modify or customize your car, you tend to mistreat your cars or, you want to own a car.

You should choose car leasing over buying when: You want smaller monthly payments, you prefer to get a new car every 2-4 years, you don't want to pay for pricey repairs, you drive less than 15,000 miles per year or, you keep your car in good shape.

You are typically required to have a higher credit score when you lease a car than when you purchase one. That's because leases have lower down payments and monthly payments. If you have a poor credit history, you may have to pay a higher interest rate on the lease. Or worse, you might have your lease application denied all together.