With car sales expected to increase this summer, thanks in part to car dealerships making the car buying and leasing process easier, those going car shopping may have many questions. Not only are consumers wondering which car will give them the best mileage and resale value, many consumers wonder if it is best to buy or lease a car.
And while car dealerships may be slashing prices, making it easier to buy a new car, new car leasing still remains the better choice for those who are looking for lower maintenance, lower upfront costs and lower monthly payments.
Leasing a car vs Buying
When buying a car, you are actually purchasing a car no matter how much you drive it. That car is yours, and you will have a sense of ownership, especially when you have made that final monthly payment. However, your monthly payments will likely be higher when you buy a car versus leasing one. Buying a car also takes more upfront money. You will usually need to put a down payment, pay sales tax and pay an interest rate depending on the type of loan you have taken out. Since you own your car, can always try to resale it for its depreciated value.
There are, however, some fundamental differences when leasing a car. For example, you pay for the time you have used the car while driving it. Leasing is a type of financing, it is not renting a car. You will usually not be required to put a down payment. So, for consumers who may not have the upfront cost buying a car takes, leasing may be the best option. In addition, your monthly fees will be lower with leasing. Having the money it takes out of every paycheck to own a car may be troubling for many consumers. Leasing allows consumers to experience the benefits of a new vehicle without the heavy price tag.
Finally, if you are someone who likes to always have the newest car features, and do not want to worry about maintenance, then leasing cars with insurance is the best deal. It may take several years to pay off a car loan, leaving you with an outdated vehicle. At the end of your lease, however, you have the option to return your car or purchase it for its depreciated value. This gives the consumer the ability to upgrade. If you lease cars with insurance, you also have routine maintenance included.