Tough Life Decisions: Should You Lease or Buy a Car?
There comes a time in every consumer’s life when that person will have to obtain a vehicle. Vehicles are essential for getting back and forth to work as well as completing other tasks such as visiting the doctor and shopping for groceries. Consumers have two options when it comes to getting their hands on a vehicle that can suit their needs: Leasing or Buying. Benefits exist for both options. The following contains some information on the two processes.
The Difference Between Leasing and Buying
The main difference between leasing and buying a vehicle is the ownership aspect. In fact, some people may address leasing vs. buying by calling it owning vs. not owning. The consumer does not own the vehicle in a leasing situation, but he or she can choose to buy the vehicle at the end of the lease term. A buyer becomes the owner of the vehicle as long as that person keeps up with the monthly payments.
The Requirements for Leasing vs. Buying
Any deal that requires a contract signature will require the consumer to be at least 18 years of age or older. Buying and leasing opportunities require an applicant to have proof of income and a decent credit score, as well. Ironically, leasing opportunities require consumers to have better credit standings than buying opportunities do. Finance companies will work with buyers who have low credit scores. They may have to pay higher rates than other people have to pay, but they will be able to walk out with a new vehicle.
The processing costs are significantly different with leasing and buying situations. A buyer will only have to put down tax, tag and down payment monies. The down payment is negotiable and not always necessary. A leasing customer will have to provide the financial institution with various upfront costs such as a security deposit in case something happens to the vehicle before the vehicle return date. A leasing customer may also have to submit additional up-front costs.
Monthly Payment Differences
The monthly payments for a lease deal are always going to be smaller than the monthly payments for a buying situation will be. The reason is that a buyer is paying for the entire cost of the vehicle while the leaser is only paying for the depreciation value of the vehicle.
A vehicle buyer has the right to customize the vehicle in any way that he or she desires. A person who is leasing a vehicle can make modifications to it so long as that person removes the modifications before the vehicle return date so that they don’t affect the future value.
The End of the Agreement
A vehicle buyer owns the car at the end of the contractual agreement. A vehicle leaser can choose either to return the vehicle at the end of the agreement or to trade it in for a new model.
Selling the Car
A buyer can sell the car once he or she has made all of the appropriate payments. A leaser cannot sell the vehicle unless he or she buys the vehicle. Furthermore, the leasing company may hold that person responsible for any damages that occur while the consumer has possession of the car.
What’s Right for You?
An interested person will want to consider all of the previously mentioned aspects of automobile ownership. Buying is a better option for sentimental people who do not mind an aging vehicle if it is a reliable vehicle. Leasing is best for people who like the temporary thrill of getting into new vehicles every few years. All persons should speak with a reliable dealership about the options they desire today.