Purchasing Beats Leasing A Car Every TimeKeeping out of debt is easier than you think. It is merely based on a collection of good financial decisions you make, such as budgeting, retirement planning and saving, all of which mean you will likely find yourself with no financial troubles at all. But, there are areas where good financial thinking isn't as simple as black or white. Obviously, it is always good to take a look at all of the alternatives available for you. One of these grey areas is automobile leasing versus purchasing a car outright. Both have their positives, but leasing seems to be the most expensive alternative, despite its short term positives.
Buying Means It's YoursPurchasing a vehicle is one of the things almost every North American seeks as one of the status symbols for a "good life". Certainly, it is definitely not too much to ask for. And having a car has its benefits, especially if you have to travel for work, or commute, or like to take road trips. But by leasing, you commit yourself to only an allotted amount of mileage, meaning you may have to limit yourself. Additionally, when you purchase a vehicle, you can trade it in if and when you like. With leasing, there are often mandatory trade in periods during which you must purchase your vehicle. Contracts often also specify that "excessive wear" will result in charges, among other things. And by purchasing your car with a loan, you know that at some point (once the loan is paid off), the car will be yours. Plus, especially with rates where they are now, getting a loan is starkly cheaper than leasing, which can typically cost as much as 15-20% per year.
Leasing Does Work In Some Situations
If there is an advantage of leasing, it's the down
payment, and the lower monthly payments. If you are in a spot where your
credit is tight, and you may not have as much cash at the ready as you
would like, leasing can be superb for you. In fact, it can often mean
the difference between you having a vehicle at all, or not. A lot of people
also use leasing because they typically like to get a new car every few
years. And, the tax benefits of leasing can be good, especially for people
who use their vehicle for business. But, those costs are typically outweighed
by leasing itself, which is quite a bit more expensive on an annual basis
than buying outright.