Tuesday, July 31, 2012

Should I Buy or Lease a New Car?

Leasing vs ownership, man with new car
Source: FreeDigitalPhotos.net


You're faced with the task of getting a new vehicle. Do you buy, or lease? Many people are confused by the idea of leasing a car- some tend to think they could never do it, that it is only an option for business owners. But that isn't the case! In 2011, roughly 25% of vehicle sales involved leases, according to Jesse Toprak, the vice president of Truecar.com. When it comes to deciding between ownership or leasing, each has their own unique benefits and it simply boils down to which suits your needs better.

What is a lease and when should you consider one? 

By leasing a car, you are basically agreeing to rent it for a set duration of time, usually somewhere in the ballpark of several years. At the end of the lease, you can switch to an entirely different and brand new vehicle, or in some cases, you have the option of paying off your current lease and owning the car. With a lease, your monthly payments are going to be much lower as well, sometimes as much as 30-60% than if you were financing a car with the intent of owning it. For example, at the time of this writing, a 2012 Toyota Corolla can be leased for $159 a month (depending on your down payment, though it is generally lower than if you were to purchase a car) and the lease comes with two years of ToyotaCare, which covers most of the maintenance your car will need, as well as complimentary 24 hr roadside assistance. 
If you like the idea of getting a new car every few years, want lower monthly payments, and not have to worry about large repair bills, leasing is definitely an option to consider in your search.

When is buying a car a better alternative?

If the thought of always having a car payment doesn't suit you, you are better off purchasing in the long run. It's also a good idea if you drive a lot, as a lease may end up more expensive than ownership. This is because with a lease, there are generally mileage restrictions on the amount you can travel per year. For Toyota, it's around 12,000, with a cost of 15 cents per mile after. When it comes to overall cost, don't forget to factor in insurance as well- a leased car will in most cases be more expensive to insure, though it is also dependent on the age and driving history of the individual. Of course, with ownership, you also get the freedom to do whatever you want with your car. Feel like modifying it? Adding giant speakers? Selling it? Go right ahead.

Final thoughts:

  • Go with a lease if you want a lower monthly payment, enjoy the thought of driving the newest cars every few years, and not having to worry about regular maintenance.
  • Be sure to check out and stay current with available lease specials- some are much better than others, but only offered for specific vehicles.
  • It is better to buy a car if you drive more than 12,000 miles a year and are wanting an investment for the long run.



18 comments:

  1. Of-course you need to buy a new car. Lease Proposals

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  2. In this post very nicely describe Buy or Lease a New Car. You have given step wise information and also description regarding if you want buy car or take a lease car. So thanks for share this valuable information.

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  3. You're welcome. Thanks for reading!

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  4. Well-written article since you have fully described the difference between buying and leasing cars! Do share more helpful posts!

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  5. Thank you, I appreciate it! Will definitely continue writing more useful posts.

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  6. It depends on your Home Or pocket situation boss. If you have enough monthly salary and you can afford and you can pay bills on time so OK go for lease and buy some great car but if you are not and you feel like there will be a problem in future so go and buy full paid car.

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  7. thanks for the insightful article. With the company i work for we use Business Contract Hire which is good because it a great alternative compared to buying multiple cars and vans

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  8. Awesome post! I recently was able to get Toyota car through taking out a novated lease. The company itself have been really great with me so far as I'm from the UK and didn't even know this type of car finance was available.

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  9. Thanks for sharing! I was considering buying a new car, and I ended up going and getting a used one instead. I started looking at Toyotas, but I actually went to Used Ford in McAllen, TX and bought something there. There were great deals!

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  10. If you have that much cash you should go for straight purchasing option and if you are short of amount then you don't have other option than leasing a car or you could get a used one.

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  11. Thanks for your comments! Nice to see a healthy mix of buyers and leasers leaving their thoughts :)

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  12. The post is written in very a good manner and it entails many useful information for me. I am happy to find your distinguished way of writing the post. Now you make it easy for me to understand and implement the concept. Thank you for the post.car valuations australia

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  13. Good comparison you did here. You have stated clearly the facts, making it a lot easier for those who are planning to get their own car.

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  14. Thanks for sharing this! I think leasing is the best option mainly because you never have to make a permanent commitment to the car that you acquire. My friend is looking for some cars for sale in NJ and I have recommended that he lease instead of buying. It has been a very popular option with a lot of people when it comes to acquiring cars, and I think it is the best one.

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