Leasing vs. purchase
It a difficult and confusing choice for anyone and there is no clear answer that applies to everyone. The decision to lease or buy will always depend on your personal circumstances.
When leasing, it's important to consider a vehicle that best retains its value and rethink cars with a high depreciation rate. Also, when entering a lease agreement, be aware of any clauses in the contract regarding additional charges for "excess wear and tear" or above-average costs for additional mileage. Read the fine print before signing the lease.
Buying: The Benefits
- The greatest benefit of buying a car is that you may actually own it one day.
- You will one day be free of car payments.
- The car is yours to sell at any time and you are not locked into any type of fixed ownership period
- There is no restriction on mileage
- No penalty for minor dinks and dents
Buying: The Drawbacks
- Monthly payment may be higher on a purchased car
- Down payment may be required so initial cost will be higher
- Limitation on depreciation allowed for business users
- Maintenance costs increase as the car gets older
Leasing: The Benefits
- Lower out-of-pocket costs when acquiring and maintaining the car
- No upfront sales tax payments
- Monthly payments are usually lower
- You get the pleasure of owning a new car every few years
- Â Fully deductible expense if used for business
Leasing: The Drawbacks
- You always have a car payment
- As long as you lease, you never really own the vehicle
- The mileage restrictions of leasing pose another drawback
- Insurers usually charge higher coverage costs for leased vehicles
- You may have to pay extra for excessive wear and tear
