It can be easier to take a car for granted when you’re young and learning to drive. After all, Mom and Dad already did the financial heavy lifting of purchasing, maintaining, insuring, and – in some cases – fueling the car. While these young drivers might need to spend a twenty now and again to cover extra gas costs, they don’t truly feel the pinch of automobile costs until the end of college rolls around and they realize that they can’t keep their parents’ SUV forever. Instead, they need to crunch their budgets to see if they can afford to own and keep a car without their parents’ help. In this blog post, I’ll discuss the relative merits of buying a car versus leasing one.
Leasing has its perks. Under a lease, drivers can take a new car home every two to three years while paying lower monthly fees than the average auto loan demands. Because the car is newer, it will have fewer mechanical problems and remain under warranty for the duration of a term. Leasing will thus cost you less in expensive maintenance than a comparatively priced older car might if you bought it outright. With a lease, you also don’t need to worry about offloading your car when you want a new one; you simply trade it in for a newer model at the term of your lease agreement expires.
Leasing may not be for everyone, however. While a lease gives you possession of the car, it does not give you ownership. Lessees are not permitted to alter or damage the car in any way, even if the change is a simple paint job customization. Drivers must keep the cars in top condition and mind their mileage limits; otherwise, they might find themselves holding pricy wear and tear fees when they return the leased vehicle. In the end, signing a lease simply may not make financial sense. While the monthly bill for a lease is typically less than what a car loan would demand, leases often cost more in the long run when those monthly payments are added up – and backing out early isn’t usually an option. Leases tend to include penalties against early termination in the fine print.
Who doesn’t want to own their car outright? Car ownership allows drivers the right to customize and drive their vehicles without needing to mind mileage limits or vehicle quality. By keeping the same car over a period of years, owners spread out the cost to be significantly less than the total bill of a lease.
Car owners don’t have the baked-in perks of a lease. When a bought-and-sold car’s warranty runs out, the weight of maintenance costs falls squarely on the owner’s shoulders – and depending on the age of the car and the nature of the problem, these issues can become expensive. In the short term, car owners also face higher monthly bills for their car loans. If they decide to sell their car, the responsibility of finding a buyer and filing the proper paperwork is entirely their responsibility.
In the end, the decision comes down to the individual situation. What are the driver’s finances? Can they afford the monthly expense of a lease, but not the heftier burden of a car loan? Does their daily commute to work push their mileage count above what a lease would allow? All of these questions need to be asked and considered before a driver makes their final decision.