Leasing vs. Buying: Which is Right for You?

If you’re in the market for a car, the first thing you should decide before visiting a dealer is whether you plan on leasing or buying. This decision will affect how you go about shopping for one so make sure you have given it some thought first.

How do you know what option is right for you? Think about what is important to you in a vehicle and ask yourself which of these quotes fits your expectations for automobiles:

Variety is the Spice of Life

If you are someone who likes a lot of change when it comes to what you drive, a short-term lease may be better for you. Most leases end after about 24 months, so you’ll change vehicles fairly quickly. Since a car depreciates the moment you buy it and drive it off the lot, trading it in every few years doesn’t benefit you financially. If you want to do this sort of thing, lease, don’t buy.

Life is a Highway

Leasing is convenient and allows you to avoid costly repairs because your time with the car is relatively short. However, if you plan on putting a lot of miles on your car, you’re better off buying. Most leases limit the amount of miles you can drive each year to somewhere between 10,000 and 15,000. If you go over this number, you have two options. You can pay for the miles that you went over, or you can buy the lease out.

Another thing to consider, if you have a lifestyle where you’re rough on your car, wear and tear damages can really add up at the end of the lease.

Time is on My Side

Buying allows you to drive your car until the wheels fall off or sell it at any time. Most leases come with early termination fees. If you sign up for two years, you’ll mostly likely need to stick to it. If you’re looking for something for the long haul, though, buying is right for you. If you need something for a few months, buy a cheap used car. You won’t spend a ton of money, and you’ll likely make the money that you spend on it back when you go to sell it.

How Low Can You Go?

With leases, you’ll pay a lower monthly payment for a higher-end car because you are only paying off the depreciation on the car, not the full amount. The downside: you have no trade-in value at the end of your lease. If you’re comfortable with essentially renting the car and would rather take the monthly hit versus paying a ton of cash up front, lease your vehicle.

No Muss, No Fuss

In the past, many people leased because they believed there was less haggling involved. You walked in, signed a lease agreement, and drove home in your new car. Four years later you returned, handed them the keys and drove out in a new car again. While lease returns have started cracking down with increased fees, car companies are starting to make the buying process more enjoyable.

The days of haggling are over. Companies like TrueCar are creating a hassle-free buying experience. TrueCar issues savings certificates which can be used at TrueCar certified dealers, giving you the best price with no haggling involved. TrueCar also tweets out car deals for even greater savings.  If you’ve avoided buying a car because you hate the idea of wrestling with the car sales rep over dollars and cents, TrueCar has eliminated that inconvenience of car buying.

Ultimately, leasing versus buying becomes a personal choice based on your needs and preferences. Leasing has the advantages of flexibility, while buying costs you less in the long run.

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