Are you buying your first car? Chances are, you’ll have a hard time ignoring all the super-low monthly payments that you can see all over the place. However, a smart purchase always transcends cheaper monthly payments.
For this reason, it’s important to consider other expenses that go with driving your first car. Some of these are maintenance and repairs, fuel cost, and insurance. Before you make the decision, make sure you know the pros and cons of both traditional car financing and leasing.
Advantages of leasing a car
Here are some of the known benefits of leasing your first car.
Low monthly payments
This is probably the number one reason why people opt for leasing a car. Since you’re only paying for the depreciation of the vehicle during the lease term, the monthly payments are significantly lower than if you were to buy the car outright.
At the end of your lease term, you can simply return the car to the dealership. If you’re not ready to commit to a car just yet or you’re tired of your current ride, this is a great option. You can also lease a new car every few years, so you’re always driving something new.
Offers Low or No Downpayment
When you buy a car, you’ll need to come up with a downpayment. This could be 10% or 20% of the vehicle’s selling price. Leasing a car, on the other hand, could have little to no downpayment required.
Lease A Used Car
You can also lease a used car. This is a great option for people who want to lease a high-end vehicle that they otherwise couldn’t afford to purchase.
Multiple privileges at the end of a lease
Leasing offers several options at the end of the lease like a buyout, returning the vehicle, or leasing another one.
Short-term Lease Offers
Leasing a vehicle allows short-term leases of less than three years. This type of lease could prevent you from any mechanical issues that are common with older and used cars. However, most car troubles are covered by a manufacturer’s warranty.
Disadvantages of leasing a car
Some disadvantages come with leasing a car. Be sure to consider these before you sign on the dotted line.
You’re Never Really Driving “Your” Car
Since you don’t own the car, you can never truly call it your own. You also can’t make any modifications to the vehicle without asking for permission from the dealership or leasing company.
Restrictions on Mileage
One of the biggest disadvantages of leasing is that you’re given a mileage restriction. If you go over this limit, you’ll be charged a fee for every mile driven.
Leasing companies typically allow 12,000 to 15,000 miles per year. If you think you’ll need to drive more than this, it’s best to purchase a car outright.
Early Termination Fees
If you need to end your lease early for any reason, you’ll be charged an early termination fee. This could be several hundred dollars, so it’s important to be sure that you can commit to the entire lease term before signing anything.
Continuous leasing cycle
Leasing could become a continuous cycle if you’re not careful. Since you never really own the car, you could find yourself leasing a new car every few years.
Advantages of Buying a Car
Now that we’ve gone over the pros and cons of leasing, let’s take a look at some of the benefits of buying a car.
You Own the Car
One of the biggest advantages of buying a car is that you own it outright. This means that you can do whatever you want with it, including making modifications or selling it whenever you want.
No Mileage Restrictions
Another great benefit of owning a car is that there are no mileage restrictions. You can drive as much or as little as you want without having to worry about being charged extra fees.
Every car payment you make is one step closer to owning the car outright. Once the car is paid off, you can use it as collateral for a loan or sell it for a profit.
No Early Termination Fees
If you need to sell your car or trade it in for a new one, you can do so without having to pay any early termination fees.
Disadvantages of Buying A Car
Of course, some disadvantages come with owning a car. Be sure to consider these before making your final decision.
More Expensive Upfront
One of the biggest disadvantages of buying a car is that it can be more expensive upfront. You’ll need to have a downpayment, as well as money for taxes and fees.
You’re Responsible for Maintenance and Repairs
Another downside of owning a car is that you’re responsible for all maintenance and repairs. This can be costly, especially if something major needs to be fixed.
A good alternative
Do you want to take advantage of both worlds? There’s a way that you can benefit both from buying and leasing a car. You can ask different dealerships if they have a car lease-like offer that you can qualify for your first car.
How does this work? Particularly, in a lease, you don’t own the car. However, with this kind of offer, you’ll have the title of the vehicle in your name and you can either trade, sell, refinance the car anytime, or return it to the dealership at the end of the term.
If you’re planning on driving different cars every several years with all the perks of owning it, this could work for you. Check with different car dealerships about this offer.
Is it better to lease or buy a car in 2022?
The answer to this question depends on several factors, including your budget, driving habits, and long-term plans. If you’re looking for a new car in 2022, be sure to consider all of your options before making a decision.
Leasing may be a good option if you’re looking for a short-term solution or don’t plan to keep the car for more than a few years. However, if you’re looking for a long-term investment or want to be able to modify your car, purchasing may be the better option.
Ultimately, the best decision for you will depend on your individual needs and circumstances. There are several factors to consider before you decide to buy or lease a car. So, make sure you understand all the pros and cons before making your final decision. Thanks for reading! I hope this article was helpful.
If you have any questions, feel free to leave a comment below.