It’s summertime in 2022, and that means that a lot of people are thinking about buying new cars. But should you lease or buy? That is the question on a lot of people’s minds. In this blog post, we will discuss the pros and cons of both options and help you make a decision that is right for you!
There are a lot of things to consider when making the decision to lease or buy a car. The first thing you need to think about is your budget. Many people dream of owning their own car, but for some, the monthly payments can be prohibitive. You would have to find the best car loan rates in order to get an affordable payment these days.
How to finance a car
There are a couple of different ways to finance a car. One way is to lease a car. When you lease a car, you make monthly payments to the dealership or leasing company for the use of the vehicle. You don’t have to worry about financing an auto loan because the dealership or leasing company owns the vehicle. At the end of the lease term, you can return the vehicle to the dealership or leasing company.
Another way to finance a car is to take out an auto loan. With an auto loan, you secure financing from a bank, credit union, or other lender and make monthly payments until the loan is paid off. Then, you own the vehicle outright. There are pros and cons to both leasing and buying with an auto loan. It’s important to do your research and figure out which option is best for you and your situation. Whichever route you choose, remember to stay within your budget so that you don’t end up over stretching yourself financially.
Leases have limited mileage
When you sign a lease for a car, truck, or SUV, you agree to certain terms set forth by the leasing company. One of those terms is typically a mileage limit. This limit is usually between 12,000 and 15,000 miles per year. If you exceed that limit, you will be charged extra fees. The amount of those fees depends on the leasing company, but they can be as much as $0.25 per mile.
That may not sound like much, but it can add up quickly. For example, if you exceed your mileage limit by 5,000 miles, you could be looking at a bill for $1,250. So if you’re planning on doing a lot of driving, it’s important to keep that mileage limit in mind. Otherwise, you could end up paying more than you bargained for.
If you buy the car, it’s yours!
If you have a larger budget and don’t mind making higher monthly payments, then buying might be the better option for you. When you buy a car, it’s yours to do with as you please – so if you decide you want to sell it or trade it in after a few years, you can do that. There are no mileage limits with buying, so you can drive as much as you want without worrying about extra fees.
Cars depreciate and are not a good investment
Of course, there are also some drawbacks to buying a car. For one, cars depreciate in value over time – so if you decide to sell it after a few years, you probably won’t get as much money back as you paid for it. Additionally, if you have a loan on the car, you will be responsible for making those payments even if you decide to sell the car – which can be a financial burden.
So, which is better? Leasing or buying? The answer ultimately depends on your individual circumstances. If you have a limited budget, then leasing might be the better option. If you have a larger budget and don’t mind making higher monthly payments, then buying might be the better option. It’s important to weigh all of the pros and cons before making a decision – and to consult with a financial advisor if you’re still not sure which is right for you.