While the decision to buy or lease a car depends on multiple factors, including their strength and weaknesses. Knowing the main aspects of both options can help you come to a conclusion on which one you will choose that is in line with your financial goals and lifestyle.
Car leasing has two great advantages —lower monthly payments and a chance to drive a new car every few years. Otherwise, leases often feature mileage limitation and an extra fee when exceeded. Also, customization in a leased vehicle is quite limited and getting rid of it in the middle of the term can cost you extra.
In contrast, purchasing a car creates a feeling of ownership with the liberty to adjust the vehicle to your needs and drive as much as you can without limits regarding the use. Generally, income for monthly payments for buying a car is higher than to lease. However, on the other hand, you could own an asset with a resale value after paying off your loan.
Align your financial circumstances, driving habits, and long-term plan(s) to make it an informed decision. In the case any of the above factors work for you, namely the lower monthly payment, the possibility to drive a new car, and meet the mileage limits, you may benefit from leasing. Contructively, if you like the ownership, customization and unlimited mileage, the buying option is the best alternative.
Finally, the choice between leasing and buying depending on the specifics of your financial situation and personal taste determines. When evaluating your priorities and considering long-term effects, it will help you to choose the option that is most helpful from your standpoint and in harmony with your overall financial plan.
