Mobility is an important aspect in today’s fast-paced world, and there are many ways to achieve it. You can use a cab-hailing service or public transport to get to work but often times the convenience of having a vehicle beats those other options. Many people narrow down the choice to buying or leasing but making the final choice can be quite challenging.
The ultimate decision largely depends on personal preferences, especially when it comes to the cost. One of the best ways to decide between buying and leasing is to evaluate the pros and cons to each. Here are some of the factors to consider before making a final decision.
Purchasing a vehicle means that it will be completely under your ownership. However, vehicles can be quite expensive, and you might have to secure a loan to purchase the vehicle you want. This is the most common route for many people, making regular monthly payments until they clear the loan.
Advantages to buying
- The monthly payments cover the cost of buying the vehicle for your ownership.
- The total cost is agreed upfront when deciding to purchase; thus no added fees are involved.
- Purchasing a vehicle gives you a wide range of options to choose from.
- You get some resale value if you decide to sell the vehicle after some time.
Disadvantages to buying
- You will pay more than what you would have paid to lease due to higher monthly payments and other expenses such as interest.
- Resale value might turn out less than what you expected.
Leasing simply means renting out a vehicle for a specified duration of time, usually between 1 and 2 years. It is more straightforward than purchasing the vehicle, but there are guidelines on how the vehicle should be used.
- Your monthly payments will be significantly lower than what you would have to pay if you purchase the vehicle.
- Leasing allows you to change the vehicle after two or three years, allowing you to upgrade to the latest vehicle affordably.
- There are no trade-in or selling challenges since you only have to return the vehicle after the lease duration is over.
- Leasing usually comes with a mile limit, which means you cannot drive the vehicle as much as you can. The limit may range between 10,000 to 15,000 miles.
- It limits the places you can visit with the vehicle. For example, you might not be allowed to take the vehicle offroad.
- The vehicle will be inspected upon return, and you might have to pay some extra money for damage, dents, or scratches.
If you use the vehicle for short daily commutes to work, then leasing might be your ideal choice. However, if you want a vehicle that you can use however you want, it might be a good idea to buy. The ultimate decision will depend on your lifestyle.