Confused on whether to buy or lease a car? Each one offer you merits and demerits. So, based on the benefits and your budget, you can decide what to do. See what are all benefits and drawbacks that you get, if you buy a car or if you lease a car.
Advantages of leasing a car
- If you lease a car, your down payment will be low or not-at-all when compared to the loan payments when you buy a new car. You can only pay for the use of the car for a particular period of time.
- There will be a chance for you to change the car for every few years, based on your needs and budget. You will have a chance to choose the car equipped with latest technology and features which you can’t buy.
- You can pay the sales tax only for the portion of the vehicle you made the finance.
Disadvantages of leasing a car
- The car will not belongs to you permanently and will be with you only for a limited period of time. Also, you need to return to the leasing company once the contract is closed.
- If you exceed the mileage limit or if the car is not maintained properly or if you make any damage to the car before you return it to the leasing company, you need to pay additional costs to the company.
- Some companies will not have GAP insurance to their vehicles, which will make a lot from your pocket, if you unknowingly lease it.
- You need to make the payments until the end of the lease period, which can be burden sometimes; and for some companies, if you want to terminate the contract, you may have to pay the termination penalty also.
Advantages of buying a car
- You can have your own car with no limits in the mileage or anything.
- You can customize your vehicle as your wish, add whatever you want like gadgets, safety equipment, if your vehicle supports.
- You can use it for years, until you feel you need to resale it or sell it anytime.
- Insurance limits or policy will be lower, if you buy a car compared to leasing.
Disadvantages of buying a car
- Higher monthly payments for the loan in the form of initial down payments will be high depending on the vendor when you purchase the car.
- Unexpected costs from your pocket, if your warranty expires or if there is a big repair for the vehicle.