Leasing Vs Buying A Car: What’s The Best Value For Your Money?

Close up of car dealer giving keys of a new car to woman. Concept for car rental

Whether you’re looking for a new vehicle to add to your household, supply your business with top of the line vehicles or just looking for something new to drive, there’s more than one way to get behind the wheel of a new car.

Depending on your circumstances, there are two main options. You can either lease a vehicle or purchase one via finance/outright. But which option offers the best bang for your buck? Which one gives you the most freedom on the road and is there a greater benefit for a business or personal use?

Below we go over how each option works along with the pro’s and con’s to help you with your purchasing decision.

What Is A Car Lease & How Does It Work?

Unlike buying, when leasing a vehicle you’re not paying to own it, you’re paying the depreciation value along with interest and any fees over an agreed length of time. There are some lease agreements where you can purchase the vehicle at the end of your agreement for a discounted price but that’s optional.

Other things factored into a lease agreement is the mileage per year, the lower miles you plan to drive the better your lease deal should be as there would be less wear and tear. The downpayment and monthly costs depend on your agreement but when compared with financing a vehicle, these are considerably cheaper and can be renewed at the end of your lease at an even lower cost should you wish to extend your agreement. On average, a car lease has 60% lower monthly payments than purchasing.

Pros

  • Lower down payment and lower monthly cost in comparison to financing a vehicle
  • You have the option to get a new vehicle every 2-3 years depending on your lease agreement
  • You don’t have $10,000’s tied up in a vehicle which is constantly losing value
  • There’s no hassle that comes with selling you vehicle later on
  • You’re always covered under warranty
  • Positive impact on your credit file
  • You can save a huge amount of money on sales tax

Cons

  • You never own the vehicle however, you have the option to purchase at the end of your lease
  • You’re limited to the number of miles you can drive which is negotiated in your agreement
  • You can’t heavily modify your vehicle
  • If you mistreat the vehicle you might be billed at the end of the lease if in bad shape

How Does Purchasing A Vehicle Work & What Are The differences?

The main benefit of purchasing your vehicle is that there are no restrictions. If you want to modify it in any way you’re free to do so, you can drive from coast to coast without having to worry about your usage.

There are two ways to buy a vehicle, in full and you own it from leaving the dealership or by finance where you pay monthly and at the end of your finance agreement, you own your vehicle. Owning a vehicle isn’t always what it’s cracked up to be, there are pros and cons to each;

Pros

  • You own the vehicle, you can customise it in any which way you want
  • You aren’t limited to how much you can drive it
  • You’re free to sell it at any point should you have financial difficulty, however, there is a good chance you will still owe the bank more than the car is worth.
  • Once you’ve paid off your finance or you’ve bought it outright, there are no more ownership costs except for regular maintenance and repairs.

Cons

  • Depending on the vehicle you want to purchase, you could have thousands of dollars tied up in something that’s only going to depreciate in value
  • If you’re purchasing through finance, your down payment and monthly payments will be considerably higher
  • It’s not cost-efficient to upgrade every couple of years
  • You’re responsible for all maintenance, repairs and costs which can sometimes be extremely costly on a vehicle that is 60-72 months old and out of the factory warranty.
  • The longer you own it the more money you’re losing out on long term

Should You Buy A Vehicle Or Lease One?

Now we’re always going to be biased here and say leasing it the much better option but leasing is not for everyone. If you’re on a limited income or receive an irregular salary, owning a vehicle outright can be much more beneficial and removes the stress of making your regular payments.

We don’t know everyone’s circumstances so we’re not in a position to say which option is better however below are 6 examples where leasing a vehicle is much more beneficial than purchasing one;

  1. You want the freedom to upgrade your vehicle regularly – If you’re one of those people who wants the latest vehicles or want to upgrade your vehicle as regularly as you do a cell phone, leasing is perfect for you. You have the ability to change vehicle every couple of years without the costs associated with purchasing one new.
  2. You own a business and need a fleet or to supply your sales team – Business car leasing allows you to supply your team with the latest vehicles which represent your business on first impressions. You get to upgrade vehicles every couple of years and it can massively reduce your tax bill whilst freeing up capital to invest in other areas.
  3. You don’t drive much – If you don’t have a need to be on the road to much and only rack up a few thousand miles a year, leasing takes away the maintenance and high costs of owning a vehicle whilst staying below the annual mileage threshold.
  4. You have a great credit score – If you have a great credit score and a stable income, you could be eligible to lease your dream vehicle. Whether you’ve always wanted a top of the range BMW lease deal or there’s a supercar you’ve always wanted to drive, you could lease it for two years at a fraction of the cost compared to purchasing it.
  5. You’re looking to save money – Becuase of the cost difference between buying and leasing, you could save money leasing a new vehicle over buying one. This can be very beneficial if you’re looking for some short term cutbacks or trying to lower your monthly expenditure.
  6. You get much more car for your money – When leasing a vehicle you are only paying for a portion of the vehicle. Therefore some vehicles that would be out of your budget when buying may be within the budget on a lease. More car less money.

How Does An Autolease Broker Fit Into This?

So where do we fit in? Surely it’s more expensive using a lease broker than going out and finding a lease option yourself, right? Wrong! We work tirelessly with dealerships all our the US, especially in Louisville to ensure we find the best lease deals for you.

We make our money from the dealerships meaning your lease agreement isn’t effected and our team of brokers can help negotiate down the monthly cost and downpayment whilst trying to get more mileage and better deals. When you add the travel costs of going from one dealership to another, the time invested in finding the best deal and trying to do so without the extensive knowledge our team can offer, you benefit much more from using a lease broker like ourselves.

We also offer free, impartial advice on whether a lease agreement would suit you whilst doing all the leg work to ensure we find the vehicle you want. If you would like more information on how we can save you money on your lease agreement, feel free to get in touch and a member of our team will help get you the lease deal you deserve.

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