Buy or Lease a New Vehicle: Which One is Better?
Buying a new car is an exciting decision to make. But, it involves a lot of tough decisions too. You need to consider all the options, make a budget, complete the paperwork and arrange for finances before driving home in your dream vehicle. The joy of owning the vehicle at the end can relieve all this pressure. On the other hand, you also have an option to lease this vehicle for a fixed term and enjoy its benefits over that period. Both these options come with their own advantages and disadvantages that are explained below.
Advantages of Buying a Vehicle
With the purchase, you get the ownership of a vehicle. You are free to use it in any way you feel like. There is no ending term of the lease after which you need to return the vehicle. Also, you do not need to keep account of mileage to avoid heavy fees imposed in a typical lease. If you have opted for comprehensive coverage with this vehicle, you are definitely in a profitable position in terms of finances as well. You don’t have to pay at the end of lease. Most importantly, you can customize this vehicle according to your taste and requirements.
Disadvantages of Buying a Vehicle
There are heavy down payments and many other upfront costs of buying a new vehicle. Moreover, the monthly installments are also higher in this case. If a major mechanical problem occurs upon expiry of the warranty period, it can be nothing less than a nightmare for you. It requires excessive expenditure on the repair of the vehicle.
The Advantages of Leasing a Vehicle
The best advantage of leasing a vehicle is that you can avoid the hassle of the loan application process. You do not need to arrange for upfront expenses, including registration charges, down payments and taxes. The monthly payments are also much less in the case of a leased vehicle. In fact, this can be nearly 60% lower than the regular installments that you are required to pay when financing a new car through a loan company. Every two-three years, you can drive a new car and enjoy its latest features. The warranty is a huge plus as well with this option. There is no stress of selling or trading this car when you wish to change it.
The Disadvantages of Leasing a Vehicle
In this option, you don’t have the ownership of a vehicle and you need to return it when the lease term ends. The number of miles that you can drive in a leased vehicle is limited. If you have to terminate the lease at an earlier date, the charges can be painstakingly high. In case the vehicle undergoes excessive wear, you have to bear all the costs of repairing it. You can’t customize the vehicle as per your preferences.
The decision between these two options should be made according to your individual requirements and time perspective. For a longer term, buying a car is a better option while leasing has more benefits in the short term.