The Pros and Cons of Leasing vs. Buying a Car

When most people begin shopping for a car, they first think about what kind of vehicle they want. While that's an important part of the process, another vital topic that needs to be addressed is whether to lease or buy. It's a complicated issue that many don't fully explore, which can ultimately lead to their making a poor decision they regret later.

Leasing a vehicle has certain advantages that can't be enjoyed otherwise. One of the biggest benefits is the size of the monthly payment, which is usually smaller than with purchasing. The lease payments only cover the depreciation of the vehicle, plus interest, taxes and fees.

Another big advantage with leasing is the avoidance of repair and maintenance costs. That means financial savings and sidestepping the inevitable surprises that come along with ownership. Leasing means avoiding older vehicles that are more likely to have problems, which translates into less costs and time spent at the dealership waiting for work to be completed.

Once the end of the lease arrives, people have the option of purchasing the vehicle. This protects against outside factors dropping the car's market value faster than expected. If the vehicle holds its value better than anticipated, purchasing is guaranteed to provide immediate equity. At the end of a lease, one will have a good feel for the car and if it's the right fit. In other words, leasing is like an elongated and more thorough test drive.

The downside of leasing is that it inflates insurance costs, which in turn eats up a portion of the savings enjoyed by not having to take care of repairs and maintenance. Also, if a person needs to terminate a lease early, the associated fees can add up to about the same amount as sticking things out to the end of the terms. On top of that, if the vehicle has suffered what's defined as more than normal wear and tear, another fee will be charged. Going over the annual mileage limits can also incur a fine, further eroding any savings.

Most people get right away that one of the big pluses that comes with purchasing a car is freedom. With ownership one can drive the vehicle whatever distance necessary without fear of penalty. Owners don't have to treat the car with excessive care for fear that every scratch, ding and blemish could end up costing them dearly later. That freedom also facilitates making modifications without asking for permission or having to remove them later.

A big problem with ownership is having to deal with the hassle of trading in the vehicle once it's time to get something new. Selling a vehicle can be problematic as well, sometimes requiring meeting up with strange people to show them the car, a process that can take months.

Ultimately, the decision to lease or buy a car is highly personal. Some people love the feeling of always having a new vehicle and not worrying about repairs, while others take great pride in ownership and the ability to do as they please with their car. Weighing all of the factors before making a final decision is the best way to settle on one option over the other, avoiding regrets later.

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Chris Spencer had been writing articles for wide variety of websites to do article marketing.