If you’re looking to get a car, I’m sure this decision is rattling your brain: should I lease out a car or finance and own one? This is a choice I’m sure many people face when acquiring a new vehicle and you should be informed of the pros and cons of leasing or financing.
The biggest difference between these two choices is when you lease out a car you do not own said vehicle. Not owning a vehicle means you have to follow the rules your new car comes with.
On the other hand, if you financed the car, just make the payments and the car is yours. You can do anything you want as it is your property now, but you do also get the trouble that comes with owning a car.
The Pros And Cons Of Leasing
Let’s look at the pros of leasing a car. You get to the dealership and you’re able to afford a better, newer model of car because there are fewer upfront costs. You get a lower monthly payment than you’d get buying a car and little to no down payment to boot.
You don’t need to worry about the long-term health of your car, and once the lease is up you can just get another lease for an even better car. As long as you make sure it’s working for you now and you make the payments, a lease can be pretty stress-free. So why wouldn’t you lease a car?
Well, the downside is that you don’t and never will truly own what you’re driving. Once that lease is done you will not get anything back except maybe a better credit score if you’re making the payments on time.
You’re also going to face some restrictions when it comes to driving like a mileage limit. Some of the money you save leasing might also end up being spent on extra insurance for the lease.
It seems that leasing is great for a low upfront cost. Being able to get a cooler car without saving is great if you don’t mind the long-term expenditure.
The Pros And Cons Of Financing
So, what about financing? When you finance a car, it is yours. Feel free to do whatever you want with it. Paint loud political statements on it, your very own stick figure family; no one is going to take it from you.
But in seriousness, owning a car allows you to do anything you want with it, be it replacing parts or driving it to your heart’s content. Tired of it? Then sell it or trade it in to get a lower down payment on your next NEW car.
When you’re done telling everyone that you own a car, you’re going to find some problems with this “owning” business. For one, you just spent a ton of money on a down payment and your bills are going to be more of a pain than if you have just leased it. Coupled with this, all those maintenance payments that a dealership would’ve taken care of are now yours.
And what if you want another car? You cannot just replace a car you just bought on a whim. Getting an early termination on a lease is a bit of a hassle but it is nowhere near the trouble of figuring out how to trade in or sell this new car.
Once it has left the lot, a new car’s value already diminishes by 10 percent. Once that ink has dried, the car is entirely your responsibility.
Making Your Choice
It seems like financing a car is worth it for the liberation and pride that comes with ownership. The freedom coupled with the lower overall cost, taking into account the sale or trade-in of the vehicle, is why some people strictly drive cars that they own. But keep in mind, this decision comes with a pricey down payment and responsibilities of its own.
If you currently own a car you should know both options are still viable for trade-ins, for a lease you would get a lower monthly payment for the equity of your vehicle, and when financing your car you can negotiate a lower down payment. Even if you have a totaled or damaged car you can make money off of it to contribute to a future purchase.
So, after reading this what should you do? Getting a car is not a decision to be taken lightly. Being aware of these pros and cons will make your choice a lot easier. Leasing is a great idea if you do not have money saved for a down payment and want little upfront cost.
Financing is ideal for those who do have some money saved and think the freedom of owning a car outweighs the responsibilities of ownership.