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Buy or Lease

The Pros and Cons of Buying / Leasing a Car or Truck

You know you want a new car and now it’s time to figure out what to do about it. The burning question is whether to buy a car or lease. There are some pros and cons to each.

Most people need a means of transportation and there are many options now available. Buying a car may seem like a frightening commitment but car leasing carries that same kind of commitment. One of the first questions you’ll need to answer is whether you want to buy a used care or are planning on buying a new car. If buying a used car is an option you’re considering, you’re probably going to want to forget about leasing. An outright purchase of a used car can be a less formidable commitment with a shorter term for the payoff.

Another thing to consider is your own credit rating. You may not qualify for the best terms and interest rates if you’ve had recent credit problems. Buying a car after bankruptcy can sometimes be an expensive proposition because lenders base rates and terms on credit history. If you have poor credit or a bankruptcy, you may get a better deal on a car lease.

If you’re wondering what possible advantage there is with a lease, consider the maintenance required to keep a car in good driving condition. A lease agreement will typically call for the dealer to handle the maintenance. Because you don’t own the car, you also won’t be required to pay property tax - a serious issue in some states.

However, remember that at the end of a lease agreement, you’re going to turn the car back in to the dealer. There could be penalties attached if you’ve driven more than a particular number of miles. You are also faced then with the decision to lease another car (or that same vehicle), or to make a purchase. If you’ve improved your credit over the course of the lease agreement, you may find that you now qualify for better rates and terms which could mean that a purchase at that point is more appealing.

Only you can decide which option is best for your lifestyle. And when it’s time to sign on the dotted line, only you can answer the question of whether to buy? Or lease?