Should You Purchase or Lease Your New Car: Lease!
Across the country, up to 50% of car buyers are leasing their vehicles. In the third part of our blog series about whether it is better for you to purchase or lease your next vehicle, we will discuss the benefits – and a few drawbacks – to leasing your new car, truck, or SUV.
Here are some instances of when leasing a vehicle is the best option for you:
1. If you don’t plan on ever paying off the vehicle entirely, you should lease it. Buying a car is a great option for someone who plans on paying off the entire loan they take out on the car and then on driving it for years after that point. If you do not want to commit to making monthly payments on a vehicle until it is paid off, you will be better off leasing the vehicle.
Imagine this: You are 36 months into your 65-month loan on the car you purchased. However, you’re ready to get a new car, so you decide to sell the car. Unfortunately for you, you won’t be able to sell the vehicle for any more than $8,000 and you still owe $12,000 on your original loan. You will still owe the lender $4,000 after you sell your car, making you upside down in your loan.
This type of scary financial situation can never happen if you lease the car. When your lease is up, you simply return the car to the dealer and that’s the end of it, leaving you available to go out and get another vehicle.
2. If you are on a tight budget, you should lease your next vehicle. This is especially true if you are wanting to drive a luxury vehicle, like an Audi, Cadillac, Land Rover, Maserati, or Porsche.
“If you’re wanting to drive the new Q5, we can get your lease payment as low as $419 a month,” said Jeremy Freeman, the General Manager at Audi Oklahoma City. “If you want to purchase that same vehicle outright, your monthly payments are going to be quite a bit higher each month.”
If you lease a vehicle instead of purchasing one, you’ll end up being able to afford a more expensive vehicle because the monthly payment will be lower. This gives you more “bang for your buck” when it comes to how much car you can be driving for the same monthly payment.
3. If you can not afford – or simply don’t want to pay for – expensive repair bills, leasing might be the best option for you. When you lease your new car, truck, or SUV, the vehicle will most likely be under warranty from the manufacturer for the entire time you are driving it. So if something goes wrong with the transmission or the engine suddenly stops working properly, you will not have to pay anything at all to fix it.
4. If you like having the newest and best vehicles at all times, you should consider leasing. Some people are content to drive the same vehicle for ten years. Others want to stay on the breaking edge of what’s new in the auto industry. If you like that new car smell and will not be content driving a model that’s more than three years old, you should lease your next automobile.
5. Leasing is the best option if you own your own business. Most business owners can write off lease payments as a business expense.
Of course, there are some things that you should keep in mind before you sign on the dotted line and drive away in your newly leased vehicle.
1. If you drive more than 15,000 miles a year, leasing might not be the best option for you. Many lease agreements have a limit of how many miles you can put on the car each year. If you go above this limit, you will have to pay a fine for the extra mileage.
2. If you have children or pets who ride in the car with you, you might reconsider leasing your next vehicle. Most lease agreements require that the car be well maintained. Dogs and children can be messy and you might end up being charged for any excessive damage beyond what is considered “average wear and tear” on your vehicle .
Are you now thinking that purchasing a vehicle might be the better option for you? See our list of pros and cons of purchasing a vehicle.
Are you still not sure whether you should lease or purchase your next car, truck, or SUV? Our Finance Department will be glad to discuss your options in more detail with you. Visit your local Bob Moore Auto Dealer today!