Trying to decide between leasing a car and buying a car is a big decision. Both options require a big time commitment from you, as well as a lot of money, so before you make your decision you want to make sure that you have taken the time to properly weigh the pros and cons of each option. Everyone weighs out their options differently. Some make lists, while other prefer to ask friends or family that have gone through the same experience before what their opinion is. Still others prefer to go straight to the car buying service and talk to an expert about the benefits of each option.
We all know what it means to buy a car, but in order to properly parse out the benefits of leasing, we should first review what is involved with leasing a car. When you decide to lease a car, instead of buying it outright using a loan from a bank, you only put a small down payment up front for the car. Then you continue making small monthly payments during the time that you drive the car. These payments are often about the same size as the payments that you would make if you had financed the car directly. The difference is that you do not own a leased car. It is more like renting an apartment. The car is yours to use however you like, but only for the specified period of time. Many car leasing services will give you the option of either trading in your car for a newer one at the end of the lease, or purchasing the car that you have been leasing up to that point. There are many benefits available to leasing a car. For example:
- If you drive a lot and tend to put a lot of miles on your vehicle, you can do so on a leased car without having to worry about the long term wear and tear or depreciation value.
- You do not have the hassel of trying to sell or trade in your car for the best deal. You can simply return the car to the car leasing company and pick out a new one.
- There is no need to try to get pre approved for a loan since there are not any large amounts of monies changing hands. If you have poor credit, leasing a car can be a more affordable option.
- Your car will always be new. A standard car lease lasts about 2 years. At the end of the lease, you simply give the car back and are now open to the option of picking out a new car.
Of course, when you lease a car there is really only one big drawback to keep in mind:
- When you lease a car you are not the owner of it. That means you never have the option of selling it. If the vehicle crashes you are not able to get the insurance money to buy a new one.