To buy or to lease That is the question
So you need a new car. Normally you would go to the dealer and buy a new car, or scan the paper and purchase one from the previous owner, but lately you’ve seen a lot of ads on TV telling you that you should lease a car. Is one really better than the other?
The short answer is no, one is not necessarily better than the other, it all depends on you and what you need out of the deal.
Leasing is great if you want the latest and greatest car, but can’t afford the latest and greatest prices, or if you run a company and don’t want multiple car loans on your credit report. When you lease, you are paying for the car’s depreciation (how much the value goes down) and not the whole car, therefor, the monthly payments are lower and you won’t have to pay a down payment. You will have to pay a deposits, but it will be far less money than a down payment.
However, if you lease, instead of buying, you will never be done with payments. As you’ll only be renting the car, you will never own it, and when the lease is up you have to give it back. This can be great for someone who’s job requires them to get a new car every couple of years, or for those who like to look like they live in that type of lifestyle. Also most leasing companies require you to have at least 100/300/50 in liability limits (100,000 in bodily injury per person 300,000 per accident, and 50,000 in property damage). This can cause your insurance premium to increase substantially!
Repair bills are also cheaper with a leased car. The newer the car, the less there is to go wrong with it, and many things may be covered under warranty. Before you sign your lease contract, make sure that the car is under warranty for the entire life of the lease.
Just because you’re not paying for things that break, doesn’t mean you don’t pay for other things. You may be responsible for dents and scratches when you return the car. Plus, many lease contracts have mileage caps, and you could be responsible for $0.20 a mile that you go over. It can make that final road trip a lot more expensive than you envisioned.
For many, though, looking forward to finishing their car payments, and having something in the end to either sell or trade back to the dealership is a bigger draw than the leasing option. Buying or leasing is never a one-size-fits-all type of thing. One needs to take a look at their life, their business, and what they need most out of a car.
Call Insurance Specialists and we can run the insurance rates to see if buying a car or leasing is the right move for you.
702-307-3398