Are you stuck between buying and leasing a new car? If so, then you have to the right place. Whether to buy or lease a vehicle is an ongoing debate for people that want to be in the driver’s seat. It gets even more complicated since both options have their advantages and disadvantages.
However, both options have different financial implications, and your decision narrows down to your budget, priorities, and lifestyle. When you lease a car, you will get the luxury to drive a new car every few years without ownership. With buying, you are guaranteed ownership, although at potentially higher monthly payments depending on if you choose a new or used car.
Buying a Car
If you are looking for a straightforward way to own a car, financing it may be the most suitable option. While financing a car can be expensive initially, it can save you a significant amount of money in the long run. You often have the opportunity to refinance your loan to shorten its terms and lower the interest rates and monthly payments.
The benefit of buying a car is that you will get to own it one day after fully paying it off. This means that you won’t need to pay more and you can do whatever you like with the car. Unlike leased vehicles, you will enjoy the luxury of modifying the car and selling it when you want to. Plus, you won’t need to worry about excess mileage.
Pros of Buying a Car:
- Ability to own the car
- No mileage limits
- Ability to customize the car to improve performance and comfort
- No charges for wear and tear
- Lower insurance premiums
Cons of Buying a Car:
- Monthly payments are higher on new cars
- Requires a high down payment
- Depreciation can reduce the value of the car
Leasing a New Car
For some people, leasing can be more appealing than buying because of its low monthly payments. This process involves renting a car from a car dealership a specified period. This can be for one year, two years, or three years and you will be required to make monthly payments.
At the end of the set lease period, you need to return the car to the used car dealership. Since you are not paying for the entire purchase price, the monthly payments made when leasing can be lower than buying.
If you want, you can lease another newer model with advanced features and technology. Also, you can choose to purchase the car at the end of the lease period. The best thing about this is that you can sometimes get a bargain depending on how the depreciation was measured.
Also, the lease comes with an expected mileage for which you can drive the car each year. Your monthly payment will increase if you exceed the maximum number of miles set and specified in the contract.
Pros of Leasing a New Car:
- Lower monthly payments
- Requires little to no down payment
- Ability to drive a new car every few years
- It comes with tax advantages for small business owners
- Generally all within warranty period
Cons of Leasing a New Car:
- You don’t own the car
- Requires additional insurance coverage
- Annual insurance cost is higher
- Less customization flexibility
- Requires a down payment for the best terms
- Mileage restrictions
- Charges for excessive wear and tear
Whether you want to buy or lease a car, both options have their pros and cons. The most obvious upside of buying a car is ownership once it’s paid off. The process is also very straightforward, and you will enjoy lower insurance premiums and greater flexibility.
On the other hand, leasing may be worth considering if you want a short-term financial impact. While this option involves lower monthly payments, the insurance premiums can be costly, and you won’t claim ownership unless you decide to buy the car after the lease.
Whether you choose to buy used cars in Calgary or lease a new one, make sure that you consider your lifestyle. Be realistic about your budget and decide the best option for your needs.