Should you lease a car or buy? When you lease a car, you’ll have nothing to show for your money after the payment period is over. However, it ignores the opportunity cost invested in buying. You can invest the money you pay upfront to buy a car. Following tips will help you decide whether to buy or lease a car.
Low Down Payments – Most of the car lease plans are advertised to have a down payment, but you can often get a limit by asking a dealer. However, the more cash you come up initially, the lower will be your monthly payments.
Low Monthly Payments – You are just paying off the depreciation on the car, not its full value. Your monthly payments will be much lower if you go for financing of the entire car for the same period.
Easy Turnover – If you have managed to keep your car in good shape, you can get a new lease plan and a new car after two or four years. You don’t need to worry about selling the vehicle and depreciation on car.
Do You Need Cash?
If you want to save cash, you can lease the car with minimum down payment. Sales tax is usually paid monthly as a part of the payment. Dealer will adjust most of the fees in your monthly payment plan. It will help you save cash in hand that you can invest.
Do You Change a Car Often?
You need track your odometer for driving habits. The average lease customer drives 15,000 miles every year. If you are driving less, then buying a car is better option because you will be paying for deprecation on lease.
Car Resale Value
If you use your car for family and kids, then there is a chance that you may damage your car. You’ll have to pay the renovation charges. Leasing is not the best choice if you drive a car roughly. On the other hand, you can consider buying if you keep your car in immaculate condition. In lease, you will lock a resale value that will be very helpful and it will provide some security.
Company to Lease From
When you are buying, you don’t have to worry about anything. All you need is money to buy. However, leasing is a complex relationship with a financial institution. It is best to lease a car from reputable company or an auto maker.
Next time you go for a car lease keep these tips to make the process smooth.
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