10 things you need to know about buying vs. leasing
When you're in the market for a new vehicle, one of the big decisions you have to make is whether you want to buy or lease it. Each option comes with its own advantages and disadvantages, and there's not necessarily a right or wrong answer. With that in mind, you may need to do a little more to understand how either one could be more beneficial for you based on your unique wants and needs.
That includes the following details:
1) Who owns it
Obviously, when you buy a vehicle, it's yours. That's not the case with a lease, which continues to be owned by the dealership. At the end of the lease term, you would have to return the leased vehicle (or pay even more money to purchase it), but with a purchase there are no such concerns.
2) Similar upfront costs – for new vehicles
In many cases, when you're looking to lease a new vehicle, dealerships will typically charge a roughly equivalent amount to what you'd provide with a typical down payment. Of course, you often won't be able to lease older vehicles, which come at a lower price point for purchases.
3) Leasing often comes with lower monthly payments
The cost of buying a vehicle may be more expensive over time, because you are not only paying down the cost of the vehicle, but also the interest accrued on the loan. Monthly leasing costs tend to be lower because you are effectively being charged to "rent" the vehicle from the dealership.
4) Ownership offers more flexibility
There may be a lot of things you need to worry about when you lease a vehicle because, again, it's not yours and you will need to return it to the dealership in top shape. Simply put, there will be more rules placed on you, with financial considerations if you don't live up to your end of the bargain.
5) Leasing shields you from a depreciating asset
Over time, the value of a vehicle declines, and this drop is most appreciable than the first few years you own it. While ownership means you have options – and will typically get some good value on a trade-in – the fact that you don't own something that has already lost a huge chunk of its value could be good news.
6) Ownership may cost less in the long run if you drive a lot
Because you don't own a lease, dealers will typically want the vehicle back with relatively few kilometres on it. If you're the kind of driver who tends to travel a lot in your vehicle, leasing might not make sense because you will likely be charged a small amount for every kilometre you drive over the agreed-upon limit.
7) Leasing ensures you get a new car in a few years
One of the biggest benefits of leasing is that you are always ensured that your vehicle will be, at most, a few years old. When the lease term ends, you will be able to swap out your current ride with one fresh off the assembly line, loaded with the latest and greatest features.
8) Ownership might come with more repair costs
In many cases, your vehicle's repairs in the first few years of ownership will be covered by warranty, but after that warranty expires (following a few years of ownership) you will likely be stuck with the expense. That's just not the case with leasing because you will basically always have a vehicle that's under warranty.
9) If it's for business purposes, leases may be beneficial
If you are making the decision whether to buy or lease a vehicle that's specifically for a business you own, it's generally agreed that there are more tax advantages to leasing rather than buying. That's a consideration that could end up saving you quite a bit of money over the lease term.
10) Leasing requires greater caution and care
As previously referenced, dealerships will typically want your lease turned in while it's still in great shape, so you may need to be more mindful of that fact as you go about your daily driving. That's not always easy – especially as time goes on – so buying might be a better option for those who put their vehicles through their paces.
No matter what path you end up taking, the experts at Peter Warren Automotive are here to walk you through all your options. With a massive selection of vehicles of all shapes and sizes, we can help you find the right car, ute, SUV or van – and the right deal to allow you to buy or lease with confidence. Get in touch with us today to learn more.