When you’re in the market for a car, one of the first big decisions you’ll need to make is whether to lease or buy. Although buying used to be far more common, leasing has become a popular alternative. Understanding the difference between the two can help you figure out which option is right for you.
Leasing Requires You to Return the Car
When you lease, you’re making payments to use the car for a certain period, with three years being the standard term of a lease. Once the lease is up, you must return the car, although there may be an option to buy it. When buying a car, you make monthly payments on the loan until it’s paid off, at which point the car is yours. Some people prefer paying toward a car, whereas others enjoy leasing because they get to drive something new every time they return their lease.
Buying Typically Has Higher Monthly Payments
The difference in price between buying and leasing comes down to what you’re financing. Getting a loan to buy a car means you’re financing the entire purchase price of the car. Car leasingonly requires you to finance how much the car will depreciate over the term of your lease. Since this is a much smaller amount, you’ll also most likely pay less when you lease.
Leasing Has Mileage Limits
If you’re the type of person who drives often or you have a lengthy commute, it’s important to do the math and make sure you won’t go over the annual mileage limits on your car leaseagreement. The standard annual limit is 12,000 miles, but 10,000 miles and 15,000 miles are also common limits. Dealerships have these limits to avoid excessive wear and tear on lease vehicles they will eventually be selling. Exceeding your mileage limit may result in per-mile overage charges. If you’re buying a car, you’re obviously free to drive it as much as you want, making it the better option if you put quite a few miles on your vehicle.
Buying Allows You to Customize the Car
One potential drawback with leasing is that the car is never yours, which means you need to keep it in the same condition it was in when you got it. It wouldn’t make sense to upgrade the stereo or put new rims on it because you’ll be returning it anyway. If the car gets damaged beyond normal wear and tear, you’ll also need to have it repaired before you return it or the dealership will charge you for any necessary repairs. You can customize a car you own from the moment you take possession of it.
Whether you’re interested in leasing or buying a luxury vehicle, get in touch with the trusted auto brokers at Below Invoice. We can help you find the vehicle you’re looking for at the best price. Call 949-630-0303 today to speak with one of our friendly representatives.