Leasing versus Buying a Vehicle

If you are in the process of purchasing a vehicle you may be asking yourself if you should buy new or used or lease a car or truck

. Most people want to find the most economic strategy especially when purchasing a vehicle because of the value of depreciation and the outlook on our current economy. Is it more cost effective to lease or own your car or truck? What are some of the advantages or disadvantages of both? This topic has even been in the news recently and was discussed on Fox News. Here is a look at the comparisons of leasing versus buying a vehicle.

If you need a loan to purchase the vehicle, you should know that the types of loans are different. A loan for leasing a vehicle is for the use of it. While on the other hand, a loan to purchase the vehicle is for the ownership of it. You have to decide if you want to pay the loan simply for using the car or truck or owning it. It is important to analyze your financial situation and what costs you can or want to afford. Leasing allows you to drive a new vehicle every two to three years, or when a new model is introduced. Buying will offer you lower monthly payments over a long term payoff. Essentially, owning is more cost effective.

The next comparison is cost. When you lease a vehicle you do not have to worry about the depreciation value, but at the end of making your payments to use the car you will have nothing to show for it. Once your use of the car is up, you stop making the payments to lease and have to return the vehicle. You will also have to pay for any damages that it incurred while you were leasing it. When you buy a vehicle, you own it. The car or truck will lose value because of depreciation and if you decide to sell or trade in, you will not receive as much for it that you purchased it for. If you make a decision to buy, you can then have the option of buying new or used.

Buying a used car or truck is the most cost effective option if you decide to purchase. When you buy a used car the down payment and monthly payments are much lower than a new car. You will also lose less in depreciative value because you have paid less for it. Overall, the total cost is much less than a new car. New vehicle cost has gone up in recent years while most people's paychecks have not. The overall yearly cost to purchase a used car is three times less than leasing a new one.

Leasing versus Buying a Vehicle

By: Chapman

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