Should I Buy or Lease? 5 Ways to Arrive at the Best Choice for You

Deciding whether to buy or lease a car can be a tough decision. Although a lease is cheaper, it may not give you the best value for your money. Here are five things to consider when determining whether to buy or lease your next car.

How Long Will You Want The Car For?

If you like to trade in your car every few years, a lease is certainly for you. Most leases run for two to four years. This means that you don’t want to buy something unless you plan on keeping it for five or more years. So, if you’re the type of person that needs a change every now and again, leasing is the way to go. If you want to find the perfect car that you’ll be happy with for ten years or more, obviously buying is a better choice.

How Stable Is Your Financial Situation?

Will you be able to make payments for the next five years on your car? If not, you should strongly consider leasing. According to car experts who specialize in auto repair in Edmonton, a lease is also easier to get out of because lenders relax their rules when another driver takes over the remaining portion of your lease. If you feel that you are in a position to make payments on a car, you can consider buying. Evaluating your financial situation for the future can be difficult because you can’t always anticipate losing your job, or your business going under. However, if you think events like this are likely in the future, leasing is a safer option.

Is It For Business Or Pleasure?

If you are getting a car for your company, a lease is the way to go. Your monthly lease payment can be written off as a business expense. If you are getting the car for yourself, you may want to consider buying it outright if you can afford to. You should also consider that you can take business deductions for depreciation if your company owns it outright as opposed to leasing it. The use of the car an really make a difference in your decision to buy or lease, so make sure you know what your options are before you go looking.

How Much Can You Afford?

Lease payments are typically lower than a new car payment. This means that you get more car for less. On the other hand, you don’t build equity in the car each time you make a payment. If your only option to get a new car is to lease, you should consider buying a used car instead. Choosing between buying and leasing will require you to examine your current financial situation. As discussed before, you can’t always predict how stable your finances will be in the future, however you can base your decision off of how your finances look currently.

How Much Do You Drive?

Many lease agreements restrict the amount of miles that you can drive in a year. Typically, you cannot drive more than 12,000 miles in a year. While you may be able to buy more miles, it is generally cheaper to buy a car if you need to drive more than 12,000 miles per year. Perhaps you don’t realize how much you drive, and maybe it varies depending on the day, week, or even the time of year. If you are unsure, you can talk to your regular mechanic about whether to lease or buy based on how much you drive. Many mechanics have digital records of how often you get your oil changed, so they can tell you how much you drive in a certain period of time, making it easier to decide whether leasing or buying is the way to go.

So, should you buy or lease your next car? That depends on your financial situation, how long you plan to drive the car and how much you drive each year. Once you determine how much you can afford and how you plan to use the car, you can make an educated decision for yourself. As you can see, there is a lot to consider when making this decision, but if you evaluate your current situation, you will probably find that either buying or leasing is the obvious choice for you.