Should I lease or buy a car?

Leasing a Car
When you lease a car you pay a monthly fee to use it, but you do not own the car.  Nor are your payments going towards ownership of the car as the vehicle remains the property of the lessor (the company that issued the lease.)  

Usually car leases have a fixed period, most commonly two to three years and a security deposit is required (to cover any damages after the lease expires.)  If you try to get out of the lease early, there are typically extra costs- early termination fees.  

While it sounds that there are not many benefits to leasing a new vehicle, the biggest advantage is the fact that you are not making a long-term commitment- as most new car loans are five years long.  This shortened commitment usually saves money in the long-run, and you also have the opportunity at the end of the lease to either return the vehicle, or to buy the vehicle- by paying off the remaining balance.   

Other advantages of leasing a new car, is the fact that you are always driving a new vehicle and you do not have to worry about potentially expensive repairs- as your car will still be under the factory warranty. 

Buying a Car
Now that you might be thinking- why would I want to buy a car (repairs, long-term commitment, etc.?)  Well the easiest argument is that you are building equity.  When you lease a car, you are essentially renting the car.  You do not have ownership, and once the car is returned to the lessor you have nothing to show for it.  While a person who invests into the life of a new car and not only have equity, but also have free transportation once the car is paid off. 

In addition, when you lease a new car your contract stipulates the maximum number of miles that are allowed on the car at the end of the lease.  If the mileage is over the contracted rate, it can be very expensive to the lessee.

The lessor can also nickel and dime you, when you return the car at the end of the contract.  They will charge you for every stain, ding, etc.  Sometimes buying a car is well worth not having to deal with this hassle, as your security deposit will go bust. 

If you are interested in searching for a new car, click here today.