Buying Vs Leasing A Car – The Pros And Cons
When choosing to purchase a new vehicle, one of the things you need to consider is whether or not you will buy or lease your new car.
Buying vs leasing has been a debate for many decades, with everyone having their own opinion on what should be done. But how do you decide which of these car purchasing options is best for you?
Well, today we are going to take a look and see how you can decide whether to buy or lease.
Leasing
Leasing a car usually means you are placed on a credit agreement where you pay a small chunk of the car’s value every month either until it is paid off, or until the contract is over and you can choose a different car.
Pros
Cheaper initially
If you are short on money right now, choosing personal and business contract hire deals might be better for you. The reason for this is that when you lease a car the initial cost you pay is lower, and will remain so as you go along the credit agreement. For a lower outlay it is a great idea for you to choose leasing to save you a big cost.
Increase your credit score
The food thing about a credit agreement for you vehicle is that you will also improve your credit score during the term. As you pay off your bill each month you’ll improve your credit rating and this can translate to other parts of your life such as buying a house.
Cons
The car isn’t yours
The main con of leasing a car is that the car is never truly yours. Until you have paid the full amount towards your car, you don’t own it: and this can of course be a turn off.
You’ll have a balloon payment
At the end of a term you will usually have a balloon payment if you want to own your car outright. This balloon payment is usually very expensive and will bring the final cost of the car much higher than it would have been if you bought it outright.
Buying
Buying a car is the simple act of purchasing the car for the full cost at a garage or through private sellers.
Pros
The car is yours
The main benefit to purchasing your car outright is that you own it immediately. You don’t run the risk of kissing a payment down the line and having your car taken away from you at a moment’s notice.
Cons
Big payout
If you don’t have a lot of money in your savings account then buying a car likely isn’t for you. It can be a huge outlay all in one go and this can burn a hole in your pocket.
Bear the cost of depreciation
When you purchase a car you also purchase an investment item that will rapidly decrease in value over time. Many people choose to lease purely to save losing a lot of money through selling.
Use these points to help you decide which vehicle purchasing option is best for you.
Check out this awesome infographic to help you decide between buying and leasing.
Infographic created by O’brien Toyota
