It's the old classic dilemma that faces every auto-consumer out there: Pay some cash upfront or forego the ownership and pay monthly settlements instead? Buy or lease for a new set of premium wheels? As is the standard case with every other common dilemma, there is never a slam-dunk answer. Each option has its own benefits and set drawbacks, and it all depends on a set of financial and personal considerations. First take into account your finances.
Affordability is clearly a key factor, and then you need to ask the question of how stable is your job and how healthy is your general financial situation. The short-term monthly-cost of leasing is definitely lower than the monthly payments when buying as you only pay for "the portion" of the vehicle's cost that you use up during the time you drive it. If you have a lot of cash upfront, then you can opt to pay the down Loan payment, sales taxes in cash or roll it all into a loan and your interest rate will be determined by your loan company. Buying effectively really gives you ownership of the car and that feeling of "free driving" that goes on providing transportation. If, say, you want to get into luxury models but can't really afford the upfront cash of purchasing the vehicle than you're a good candidate for leasing. Unlike buying, it gives you the option of not having to fork out the upfront down payment, leaving you to pay a lower money factor that is generally similar to the interest rate on a financing loan.
However, these benefits have a certain price such as terminating a lease early or defaulting on your monthly lease payments will result in stiff financial penalties and can ruin your credit. You really need to make sure you carve out the monthly lease payment in your budget for the foreseeable future, at least for the duration of the lease. Besides the obvious financial aspect, making a buy or lease decision depends on your own particular lifestyle choices and preferences. Think about what the car means to you, as are you the sort of person to bond with the car or would you rather have the excitement of something new? If you want to drive a car for more than fives years, you should negotiate carefully and buy the car you like. If, on the other hand, you don't like the idea of ownership and prefer to drive a new car every two to three years then you should be a great candidate to lease. Next, factor in your transportation needs like how many miles do you drive a year? How properly do you maintain your cars on a regular basis? If you answer is: "I drive 30,000 to 40,000 miles a year and I don't really care much about my cars as I don't mind dealing with repair bills", then you're probably better off buying.
Leasing a car is based on the assumption of limited-mileage, usually no more than 12,000 to 15,000 miles a year, and wear-and-tear considerations. Unless you can keep within the prescribed mileage limits and keep the car in a great condition at the end of your lease, you might incur high hefty end-of-lease costs.
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