The truth is there’s no one-size-fits-all option when it comes to the age-old question of lease or buy because you have to consider your financial situation and identify what you want from a new vehicle.

Buying a car

In the US, few people are able to pay in full when they buy a new car. Most people buy a new car with a car loan– either through the car dealership or through their bank.

Once you have paid back your loan, you will get to enjoy having a car without having to make monthly payments. However, you must consider that over time your car will require repairs and service. You will have to pay for these repairs and service yourself.

For more information getting a car loan, please click here.

Leasing a car

Leasing a car is basically a rental agreement where payments are made to borrow the car for a specific period of time and the car is yours to use and enjoy. However, once the contract expires, the car must be returned to the dealer. The leasee gets nothing in return. The total amount of time for which you lease a car from a provider is referred to as the lease term. In the US, most people who lease a car take out a lease for 2 to 4 years. Lease payments are made monthly.

Lower monthly payment

If your main goal is to get the lowest monthly payments, leasing could be your best option. Monthly lease payments are typically lower than auto loan payments, because they’re based on a car’s depreciation during the period you’re driving it, instead of its purchase price.

Limitations

Certain conditions apply when you lease a car. For example, because the car is actually not yours, you cannot make changes to the vehicle. For example, you cannot add any custom artwork to your car.

You will be told how many miles you can drive throughout the lease term. If you drive more than agreed upon, you will have to pay a fee at the end of the term.

Finally, if you want a bit more time with your new car and want the cheapest possible monthly payments, you may be best considering a four-year contract. These are easier to come by than shorter agreements and most providers offer them.

For more information getting a car loan, please click here.

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