Should You Lease or Buy?

By Posted on April 23, 2018

Should You Lease or Buy Your Next New Car?

Who doesn’t love the a brand new car? Unless you’re one of those rare people who can afford to pay cash, there are only two major finance options: leasing and buying with a loan. Leasing used to be mainly the domain of luxury car drivers or for business purposes, but for several years it has been a viable option for the average consumer, and it’s growing steadily in popularity. There are advantages and disadvantages to each method, and you need to examine the pros and cons to decide which is best for your situation.

Car Ownership Pros and Cons

The major advantages of buying a car include:

  • You own it! It just feels great to own something you can be proud of and be in control of something you use daily.
  • You get to drive it for as many miles as you want.
  • When you’re ready to get rid of it, it will have trade-in or resale value.
  • Keeping a car a long time spreads the cost over many years, reducing the annual cost of ownership.
  • You can customize the car any way you want, or even neglect it if you so wish.

On the other hand, here are the disadvantages of vehicle ownership:

  • Monthly payments are higher than for most leases.
  • Risk of expensive repairs once the car is out of warranty.
  • The hassle of selling or trading the vehicle when it is time for a new one.

Pros, Cons of Leasing a Car

On the other side of the fence, here are the main advantages of leasing:

  • Lower monthly payments than an auto loan.
  • You can get a new car every few years.
  • Warranty protection for as long as you have the vehicle.
  • No hassles of trading in or selling privately.

And here are the disadvantages of leasing:

  • You don’t own your car.
  • You’re limited in terms of how many miles you can drive each year. (Actually, you can drive as much as you want, but you’ll pay a penalty for “excess miles.”)
  • You’re required to properly maintain the car and may have to pay for damage at the end of the lease.
  • You’ll pay more in the long run for the use of a vehicle.

Everyone’s financial situation and vehicle needs are different and must be considered carefully when weighing the decision on whether to buy or lease.

121 Financial Credit Union offers auto loans to its members, and we’ll be glad to help you analyze your situation to decide whether buying or leasing makes the most sense for you. We have 11 locations in the Jacksonville, Florida, region. Contact 121 Financial Credit Union today: 800-342-2352.

4/23/2018