Pros And Cons Of Leasing A Car

To buy or to lease? Comparing your options.

Financing a new vehicle can be intimidating, especially if it is your first time. Individuals interested in a new car are faced with many options to choose from. Before they can decide they must evaluate all the financing options available to them. However, most of the decisions are determined by their current financial situation, personal needs, and preferences. Therefore, The option of buying a vehicle can be compared to the option of leasing a vehicle in terms of cost, driving habits, and ones personal lifestyle to help one determine the best option.

One of the first considerations in deciding whether to buy a vehicle or lease a vehicle would require understanding the financial terms of the

The typical bumper-to-bumper warranty ranges from three years or thirty-six thousand miles to four years or fifty thousand miles. Under a lease agreement one would be fully covered under the manufacture’s warranty for all major repairs during the duration of the contract since most leases are for three years or less. However, the car buyer will likely exceed the allotted number of years or number of miles covered under the manufacture’s warranty and may have to pay out of pocket expenses for costly repairs no longer covered under the original bumper-to-bumper warranty. Similarly, mileage restrictions while leasing a vehicle can limit the number of miles a person can drive before incurring additional financial penalties while a car buyer is able to drive an unlimited amount of miles without suffering any additional

If driving a new car every two or three years, equipped with all the bells and whistles is preferred, leasing may be the better option. This is especially true if one entertains business clients and needs a luxury automobile one cannot afford to buy. However, if pride in ownership is more important than having the latest and greatest automobile every couple of years and one does not need to use a vehicle to transport business associates around, buying a vehicle may be the better choice. Equally, tax deductions for business purposes should be assessed since both buyers and lessors are afforded some tax relief. The buyer may be able to deduct standard mileage rates as well as depreciation of the vehicle while the lessor may only be able to deduct standard mileage rates or a portion of the monthly payments for business