Leasing vs. Buying a New Car – Pros And Cons
As a consumer, it is important that we find out the pros and cons of the cars that we want before purchasing. It is imperative to research the car that you want before purchasing to ensure that you are getting the best deal. There are advantages and disadvantages of leasing and buying a car. You can write down your options and see would lease or buying a new car would be the convenient for you based upon your financial situation. When many consumers want to buy a car, they may decide they want to lease the car. There are several advantages of leasing a car. The first advantage is having reduced monthly payments. The more cash you put as a down payment on a car or opt to finance the car over a period of time, the lower your monthly payments will be. The second advantage is that you do not have to sell the car. If you decide that you want to purchase a new car, you can go to the dealership and trade in your car for a new one and sign a new lease agreement.
The only requirement to trading in your car is that it is in excellent working condition. Leasing a car can provide flexibility to the consumer who cannot afford to pay full value of a car in cash. There are also disadvantages when leasing a car. The first disadvantage is the lack of flexibility in the lease. If you decide that you want out of a lease before it ends, you may have to pay a penalty. The penalty cost varies by company. The second disadvantage of leasing a car is that lease payments have no equity. Lease payments do not go towards owning anything; it is similar to paying rent on an apartment. The third disadvantage is that your insurance company may not cover the full value of your car if something beyond your control happens (ex: accidents, storms). Your insurance company may reimburse you for the car’s market lease value, which might not cover what you still owe in the lease. Leasing may offer flexibility, but there are restrictions as well. There are consumers who prefer to buy the car at full value. By purchasing a car at full value, it can provide many advantages. The first advantage is that you would have 100 percent ownership of the car. You can customize it and drive it as hard and as far as you want without penalty.
The second advantage is that you can sell the car at any time because you are not locked into a contract with a dealership. The third advantage by paying at full value is the possibility of not having to pay a car note. Buying a car can provide positive advantages to many consumers who are not looking to lease a car. There are several disadvantages of buying a car. The first disadvantage is once the warranty expires on the car, you will be responsible for the maintenance costs. The second disadvantage is that it would be much harder to trade it in and it would be a hassle to sell it. In other words, dealerships may not want to make a trade-in deal with a consumer who purchases a car at full value (consumer may want more than what the actual value of the car is). Many car owners may have to use various types of marketing to sell their vehicle (such as newspaper ads, bulletin boards, etc.), which may be expensive for many owners. It is recommended that consumers outweighs the pros and cons of purchasing a vehicle before making a decision.