Choosing between leasing or buying a car should be based on the budget, purpose and situation of each individual. Each has its own benefits and is well suited for a particular situation and each has its disadvantages.
In deciding which to choose you must always consider your preference in a lot of advantages and disadvantages. It is often difficult to have everything that you want in a single package, it is best to choose the option which offers most of your choices.
The first that you must decide is whether ownership of the car is important to you or low up-front costs with no down payment. If you are a person who is sentimental about your car and are planning to keep it as a collection, then buying a car is probably your best option, but if having a new vehicle every two years without the risk of any major repairs is more important to you then you should probably go for leasing.
Factors to consider in buying a vehicle:
- You pay for the entire price of a vehicle, regardless of how often you use it.
- A down payment is usually paid when you purchase a vehicle
- Sales taxes
- Interest rates are determined by your loan company based on your credit history.
- First payment is due a month after you sign the contract
- You have the responsibility in selling or trading your vehicle at a depreciated resale value if you decide to sell it later on.
Factors to consider in leasing a vehicle
- You only pay a portion of the vehicle’s cost, which is the part that you use up or the duration in which you were driving it.
- Down payment is an option
- Sales tax is on your monthly payments
- You pay a financial rate or money factor, which is similar to the interest on a loan.
- Pay fees such as a security deposit
- First payment is at the time you sign your contract for the month ahead
- At the end of the lease you have the option to return the vehicle or purchase it for its depreciated resale value.
These are the factors you should consider in order for you to decide which best fits your requirements.
