Most new car shoppers finance cars – which means you need to know how you’re going to pay for it. Some people, however, consider leasing their new cars. There are various pros and cons when you buy and when you lease; these are important to weigh, as one could end up saving you money in the long run. If you have any questions, ask us at Carl Hogan Automotive!
When buying a car, you own it as soon as it’s paid off. As long as it still runs by the time you pay the last payment, you could end up driving payment-free for years to come. Plus, there are no mileage restrictions, so drive as much as you want.
Buying requires large down payments and higher monthly payments. If you’re bad at budgeting, buying could mean more debt. It’s also impossible to know the resale value - if your car depreciates to the point that you owe more than it’s worth, you’ll be upside down on the loan.
Leasing usually costs less money. Essentially, you only pay the depreciation of the car when you were driving it. There’s a smaller down payment and smaller monthly payments. Plus, you get a new car every few years if you continue to enter lease agreements.
Leases usually limit the mileage of your car, and you can’t make any major changes. Plus, you don’t own the car at the end of your term – you’re basically just renting it.