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Buying vs. Leasing a New Car: Which Option is Best for You?
Buying or leasing an automobile involves several variables; consider the options before making a decision.
It seems that everyone in the market for a new car goes through the same debate: buying vs. leasing. Which option is best, and when should consumers consider choosing one over the other? It's important to know the benefits and drawbacks of each, so that a smart decision can be made based upon each person's best interests.
First, let's take a quick minute to review what happens when cars are purchased, versus when they are leased. When buying a new or used car and financing with an auto loan, after all of the monthly payments are made, the buyer owns the vehicle outright. When leasing a vehicle, after the agreed upon payments and lease term runs its course, the individual either needs to buy that car, or buy or lease a new vehicle.
The upsides to leasing a vehicle are that it provides consumers with the ability to always be driving a new vehicle. After a two or three year lease, they can get the latest model and all of the new features, and enjoy making use of a brand new car once again. Lease payments can be lower on a month-to-month basis, but that payment will never go away or decrease because once the lease term is up, another payment takes its place.
The upside to buying a vehicle with new car loans is that consumers end up actually owning the vehicle; it's an investment that can be kept long after payments are finished. This means, as long as the car continues to be in good working order, consumers can go years without needing to make that monthly car payment.
Another benefit of using an auto loan to buy a car is that there aren't restrictions on mileage and wear and tear constraints, as there are with leases, which can cost drivers in a major way. Additionally, insurance coverage is more affordable for individuals who buy a car, than those who lease a car.
When consumers can find favorable new car loan rates, it's almost always a better financial decision to buy. Additionally, by seeking out an auto loan from outside of the car dealer itself, consumers are typically able to receive even lower rates, along with reduced or eliminated down payments, take advantage of full manufacturer rebates, and a variety of other benefits.
If the vehicle is used for business purposes, both leasing and purchasing have beneficial tax advantages. Consult your tax advisor to determine which is best for your specific situation.
Although many dealers promote lease options through advertising, it’s a fact that roughly 80% of consumers end up buying their cars, as opposed to leasing. Each person may have his or her own circumstances and preferences, but most find that with reasonable car loan rates, buying is the way to go.
BFG Federal Credit Union provides fantastic, low new car loan rates that make buying a new car a wise financial decision and investment. A credit union with locations in Akron and Hudson, BFG provides its services to all individuals who live, work, worship, attend school or volunteer in Summit County, Ohio.
BFG also provides a wealth of resources for its members, including loan calculators, informative guides and comparisons, and more, ensuring that each person knows the ins and outs of what they are getting involved with when it comes to an auto loan, as well as all other financial commitments. Visit them online at BFGFCU.org or call 800.336.4400 to speak with a representative directly and ask any questions pertaining to new car loans.