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Buying vs Leasing a Car - Which option is best?

A question that often plagues those driving a car is whether to buy one or lease one. The dilemma is resolved by a comparison of the two options discussed herewith.

buying vs leasing 3

Buying vs leasing a car

While buying the car you own it, but with leasing you can use the car but have to return it at the end of the lease, unless you wish to buy the vehicle.

● Up-front and monthly costs
For buying a car upfront costs include down payment or cash price to purchase the car along with registration, taxes, etc., and monthly payments include loan payments along with interest. On the other hand, with leasing costs include a first month payment, a deposit fee that is refundable, acquisition and registration fees, etc., followed by monthly payments which are the depreciation cost which is much lower than loan payments plus ret charges etc.

● Return of vehicle
If you want a new car then the owned car will have to be sold or traded in with the new but a leased car can be returned at end of lease with minimal end of lease cost.

● Future value
The owned car value will depreciate, but the cash value will be of the owner itself while future value does not affect a leased car owner. On the negative side, he has no equity in the car either.

● Wear and tear of vehicle
Owned car trade in value might be affected by the wear and tear but other than the owner need not worry. However for leased cars, the contract holds the person responsible for any tree excessive damage and wear and tear.

● Customization
On your own vehicle you can make any number of customizations as required, but a leased vehicle doesn't allow that option since the vehicle needs to be returned.

The plus side on leased cars is the money saved and the rest depends on personal requirements while looking to buy or lease a car.

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Posted on 19th December 2018 at 10:36 AM

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