Personal Car Leasing vs. Buying a Car
Should you opt for personal car leasing or should you just buy a car? This is a common dilemma facing anyone who wants a car. The short answer is it depends. It is quite difficult to single out just one option as there are great differences in individual needs.
In buying a car, you pay for its entire cost. You make a down payment and sales tax or take a loan. In taking a loan, you pay an interest rate determined by your credit history. After making a full payment, you may choose to trade or sell the car. Keep in mind though that the car’s value can sharply depreciate which typically starts after rolling off the showroom.
In leasing a car, you only pay for a portion of its cost. The concept is similar but it is very different from renting. It is a common misconception that only used cars are available for leasing. However, new car leases are also available. The typical leasing agreement does not require a down payment. Monthly payments are still made although they are much lower than loan payments. At the end of the contract, you may choose to terminate it completely or buy the car from the car leasing company. In this option, you buy the car at its depreciated value.
No matter what option you choose, there are benefits and drawbacks. Know what you are getting into before making a choice between personal car leasing and buying a car. It all comes down to your lifestyle and finances.
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