ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Should I lease or Buy a Car?

Updated on April 15, 2009

When it comes to deciding whether to buy or lease a car there are many things that must be kept into consideration. Perhaps the most common determining factor is your financial situation. People usually decide to lease instead of buying because they cannot afford to purchase a new car and therefore instead opt to make monthly payments. The concept is similar to renting a home rather than applying for a mortgage.

However, just as mortgages may have low monthly payments almost as low as rents, monthly payments of purchased cars may match or even be lower than the monthly lease payments. So why do people decide to lease instead of buying and what are the pros and cons of leasing and the pros and con of buying?

Pros and Cons of leasing

A new car has a special appeal. Many people may not be able to pass the temptation of getting their hands on a shiny new car. The smell of a new car entices many people and many like to visit car dealers just to get a ''feel'' of driving that new model car. As they walk in the car dealership lot, a car dealer then may approach and ''lure'' them into a deal. The finance department takes care of the rest, and within minutes, if their credit is pretty good, they are approved and given the keys of the car of their dreams.

Leasing is a short term relationship. Most leases vary but usually are not longer than 3 years. However, a lease remains a contract and with a contract there are many terms and conditions. Mileage can be an issue. Some contracts restrict the daily mileage you may be entitled to, and most of them have penalties for going over the allotted mileage upon returning the car.

You must also treat the car with white gloves. Upon returning the car at the end of the contract they will inspect it carefully and charge you for damages that are more than the normal wear and tear. The definition of wear and tear is a little murky, so it is best to check with the leasing company their interpretation.

Getting out of a lease contract is almost an unthinkable process. They have made getting out a very arduous ordeal, often quite impossible. There are some websites promising to find people to take over your lease payments but they are not a walk in the park. Think it over  very well if you are hesitant in keeping the car for the whole length of the contract.

All these terms and conditions should be gone over carefully with the car dealer before signing any contract. If your car dealer does not explain well or appears to hover over your questions, be very aware and perhaps rethink your decision or have another person help you out.

The largest flaw of leasing is that after the contract is over you end up with having nothing but memories. You will come to realize that you have spent monthly money, but yet remain with no car. However, for some people knowing they had a safe, new and reliable car makes leasing worth it, and upon returning their leased car they will happily sign up for another lease.

Pros and cons of Buying

Purchasing a car and paying monthly is like getting a mortgage. However, homes tend to be an investment that assumes value as time goes by, whereas cars tend to decline in value as the blue book points out.

If you are purchasing a new car, the good thing is that it is ultimately yours to keep. However, realistically the car is not entirely yours until you pay it off. Most lenders will actually hold on to the title until you are done paying for it. So purchasing a car and paying monthly is like a long term lease, the car is not entirely yours until you are done with your payments. Of course, all of this changes if you pay cash for your car and pay it in full.

When purchasing a car you are also purchasing freedom. You can treat the car as you want, you may add features to it, drive it how much you want without worrying about excessive mileage or wear and tear.

When buying, you are actually putting money into something that will be eventually be yours. However, once it is yours, the car will have dramatically decreased in value. You may still attempt to sell it later getting a bit of money back. In some cases, it may be worth purchasing a used car for a few years and then continuing this way. Of course, purchasing cars with high mileage for a cheap price may turn out being a very frustrating and expensive ordeal to deal with in the long run.

Some good deals sometimes may be found from used leased car companies that sell their cars at auctions. They are still young cars with many more years to live.

As seen, the idea of leasing or purchasing a car needs to be a very thoughtful one. Determine what your long term goals are, and what you wish to do with your car. Only asking yourself these questions may help you determine what is the best choice for you.

Driving a brand new car may feel like an exhilirating experience

Comments

    0 of 8192 characters used
    Post Comment

    • profile image

      Gladys Thomas 

      7 years ago

      Yes, i'm ready to try NANO

    • SEO Expert Kerala profile image

      SEO Expert Kerala 

      9 years ago from KERALA

      Now tata introduced a Car ( NANO) for 2500$ .Are you ready to try for that?

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)