We are living in expensive times, and the used car market is not immune to global price hikes. According to this article, used vehicles currently cost 40% more than last year.
If you need a new set of wheels, it’s worth considering buying a new car or leasing a car instead, especially if you have a used car to trade in.
Keep reading to discover more about these options and the differences between buying vs. leasing a car.
Is Buying or Leasing a Car Right for You?
If you can’t afford the substantial financial commitment of buying a car, leasing is a good choice for you.
You’ll pay less per month and could theoretically get a more luxurious car for your buck when you lease a vehicle. So, if you aren’t worried about restrictions and extra costs for wear and tear, go ahead and sign that lease.
Do you enjoy long road trips and being in control of your vehicle and expenses? If so, you’re better off buying a car. It takes a little extra work and costs quite a bit more to buy a new car, but many people find buying is the best bet for them.
Besides, when you own a car, you can always cut your costs by selling your car to a dealer like Cash4Cars, Bidlane, or Car Buyer’s Market and downgrade to a more affordable model.
Pros and Cons of Leasing a Car vs. Buying
The benefits of buying a car include free rein to do as you please. There are no mileage restrictions, no wear and tear charges, and you can sell it whenever you like.
On the downside, you’re in for a large downpayment, higher monthly repayments, and ongoing maintenance costs.
When leasing a car, you don’t need to put up much money as a downpayment, and some agreements don’t require any money upfront. You’ll also pay less every month for the use of the car.
However, you will have to pay extra if you exceed the mileage limitations on your contract, plus extra charges for wear and tear on the car. Extra mileage fees can amount to as much as 30 cents per mile.
You never own the car, and at the end of the agreement, you would’ve paid out vast sums of money, only to hand it back. You can’t sell the car if you want to.
Buying vs. Leasing a Car: Summary
When considering the benefits of buying vs. leasing a car, it’s vital to reflect on all the above pros and cons of leasing a car vs. buying one.
Buying a vehicle gives you complete autonomy at a higher cost, while leasing is a restrictive, albeit cheaper choice. Your credit score is the final thing that comes into play when you choose to buy or lease a car.
In both cases, you’ll need a score of above 660, to qualify.
Would you like some tips on how to save your money and improve your creditworthiness? Browse our website for handy tips and interesting information.