For many people, buying a car is the only option that they consider when looking for a new vehicle. However, in some cases leasing can turn out to be the best approach.
Therefore, it is a good idea to understand the difference between these two methods of getting hold of a sparkling new car. By doing this, you can work out how you should proceed for the best results at the lowest possible price.
How Long Do You Intend to Have the Car For?
The effects of depreciation mean that buying a brand new car and then selling it soon after is likely to lose you money. Getting one of this year’s latest models straight from the dealership and selling it soon afterwards, is a sure way emptying the bank.
Bearing this in mind, if you only plan to have the vehicle for a limited period of time, then leasing it makes more financial sense. In this way, you will get a shiny new car delivered to you when you are ready for a change, without having to pay over the odds for it.
On the other hand, if you want a car that you can use for years or even until the engine gives up, then buying one is probably the best move. In this situation, you will eventually pay off any financing that you set up, while you would need to keep on paying the leasing fee forever.
The Monthly Cost
For most of us, the monthly cost of the vehicle is one of the most crucial issues. Getting the right car at an affordable price is easier to do with the help of an auto broker, who can find great deals on both leased cars and those for sale.
However, before you get started you will want to get the issue of the differing monthly costs clear in your head. With this point, which is cheapest will come down to whether you are putting a lot of money towards the new car or not.
If you buy a brand new car then the monthly cost will typically be higher than the cost of leasing. This is because you are paying for the full cost of the vehicle rather than just for the time you use it.
Having said that, if you are trading in an older vehicle or putting down a big deposit, then this will substantially reduce the monthly cost of buying a new car. This isn’t possible with leasing, of course, so it could be a deciding factor for you.
The Amount of Miles You Plan to Drive
Are you planning to go on long, meandering trips with the vehicle or are you possibly going to use it a lot for business purposes? The amount of miles that you drive in it is a hugely important factor in this decision, although not everyone finds it easy to be clear on how much driving they plan to do.
A leasing plan will place a limit on how many miles you can use the car for each year. If you go over this amount then you will need to pay more money, which can quickly add up to a large sum if you go well over the limit.
Of course, once you purchase your own car you can use it as much or as little as you need to, with the only difference being that a higher mileage may have an adverse effect on the resale value. You should take a few minutes to think about how much you will use it and how sure you are that you won’t go over this figure.
Leasing can still make sense for heavy users, but you need to be as clear as possible about the extent of your driving before agreeing to the terms on offer.
If you have the money to pay for a new car, then buying it is going to be easy. If you need a loan then you will clearly need to get approved for a financing plan.
When it comes to leasing, you will always need to be approved first of all, which means that you need a good credit score to be successful. With a good credit score you can easily choose between financing a new car and leasing one.
If your credit score isn’t as good as it should be, then leasing is going to be difficult to obtain. Financing a purchase may be slightly easier to do if you have a good deposit or an existing relationship with the bank.
However, in some cases it may be that your options are limited to saving up to buy a car or else spending some time finding out how to improve your credit score.
Your Plans for the Future
It may be that thinking about your plans for the future will help you to decide whether to opt for buying or leasing. Do you want the freedom of being able to hand back the vehicle at the end of the leasing term or would you rather be left with a valuable possession once you have paid off your car loan and own it outright?
Maybe you see leasing for a few years as a way of getting a vehicle while you save up to buy one. Alternatively, you may think that getting an affordable financing plan is ideal for letting you get the car of your dreams that will give you years of pleasure.
We all have different hopes for the future, so there is no single approach that is right for everyone. This is why your best starting point is to sit down and think about what car you see yourself driving around in a few years’ time.
Once you make a good decision you can look forward to enjoying your new car without any worries. No matter how long you have it for, you can feel confident that it is the right car on the right terms for your needs.