Pros and Cons of Leasing vs. Buying a Car
Published: November 7, 2018
Pros and Cons of Leasing vs. Buying a Car
In need of a new vehicle? If so, then you essentially have two options: lease or buy. Not sure which choice is best for you? It can be helpful to review some of the potential advantages and drawbacks of each.
Leasing a Car: Pros and Cons
When you lease a car, you enter into an agreement that typically lasts anywhere from one to five years. You make monthly payments during this time and return the car to the dealership once your lease is up.
Many people enjoy leasing because the monthly payment on a lease tends to be cheaper. Furthermore, leasing gives you the option to easily trade in your car for a newer make and model every few years. You don't have to worry as much about maintenance costs with a lease, either, as the dealership will take care of a lot of it.
On the other hand, when you lease a car, you're making payments on something you'll never own. You also will have an annual mileage allotment, and you can be charged extra if you go over your mileage for the year.
Buying a Car: Pros and Cons
When you buy a car, you own it outright by the time it is paid off. You can either pay for your car in cash up-front, or make monthly payments, usually over the course of several years.
The main advantage of buying a car is that you own it! Once it's paid off, the car is completely yours and you can even sell it down the road to recoup some of what you spent. And of course, since the car is yours, you can put as many miles on it as you wish and make any modifications that you want.
On the other hand, when you buy a car, you are responsible for 100% of its care and maintenance costs. You also will likely end up with a larger monthly payment.
With all of this in mind, which option – buying or leasing – is right for you? If you end up buying and need to secure financing, Santa Clara County Federal Credit Union has plenty of auto loan options to suit your needs. Contact us today to speak to a loan advisor!
