What is the Difference Between Buying and Leasing a Car?
Car shoppers often have to make the decision of whether to purchase or lease their vehicle. There are many differences between these two methods that customers should know. Here are the pros and cons of buying and leasing a car.
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Advantages and Disadvantages of Purchasing a Car
Buying a car gives the new owner plenty of benefits. Once the payments are completed, the vehicle belongs to the driver. This gives the owner freedom to add accessories or make changes to the car. The owner is also free to sell the vehicle as they please. However, they will have to deal with the selling process when it comes.
Financially, buying a car has both pros and cons. If you take out a loan, you can expect payments to be larger each month than if you were to lease it. On the plus side, purchasing a car gives you the opportunity to pay it off in full. Doing this will save you plenty of cash since you won’t have to pay interest on a loan. However, be cautious before making this decision. You won’t want to drain your emergency funds just to save a few hundred dollars of interest.
Advantages and Disadvantages of Leasing a Car
Leasing a car is like rent. You can use the car, but you need to follow certain rules. It’s very important to remember that if you lease a car, you do not own the car.
Leasing the vehicle is more affordable for those on a budget. Since leases typically last two or three years, you can choose to walk away from that vehicle once the contact ends. This will give you the chance to try a different model if you choose to do so.
Disadvantages with leasing includes how the car is cared for and the length of the contract. Most dealerships will limit the mileage you can put on the car. Going over that set mileage, causing damages the dealership considers more than typical wear, and dropping out of the contract early will all cost you extra fees.