To Buy Or Not To Buy
Buying or Leasing — which one is right for you? When it’s time for a new car it can be a tough decision to make, especially if you’ve exclusively bought or leased in the past. Luckily there are a few key points to consider, and hopefully make that decision easier when shopping at car dealerships in Beavercreek Ohio.
Is This Your Ideal Long-Term Car?
Are you someone who likes to keep up with the newest trends, or do you prefer to keep what you have for as long as it’s working? If you’re not sure, take a look at your cell phone. Do you upgrade every time a new iPhone comes out, or is your old 6S still working fine? If you find yourself falling in love with a new car, with new upgrades, every couple of years then leasing could be the way to go. Hey, some of us just change our minds a lot. However,
if you’d prefer to keep your baby running as long as possible, buying could be wisest.
Buying a new car only to keep it for a short time is throwing money away. So much cash is lost as soon as your car leaves the lot, and it continues to depreciate over time. If you have a long loan, you’d likely be “underwater” (e.g. owing more on your car than is worth) when you go looking for something new. That’s where leasing comes in; you agree to have the car for a short number of years, give it back, and get something new!
Alternatively, if you lease, you always have a car payment. If you buy and keep, one day that car will be paid off and you’ll be payment-free!
Some things to consider:
- Will you be starting (or adding to) your family soon? For example, if you’re eyeing a coupe, will you be more comfortable in an SUV or minivan in a couple of years?
- Will this car be ideal for your long-term work goals? Is it large enough to carry what you need? Are you buying a gas-hog, but may end up working far from home soon?
- Is this a car that’s built to last, or is it notorious for having costly repair bills early on?
And on that note: Are you prepared for repair bills down the road, or does that seem daunting? A leased car is almost always covered under warranty. This provides a safety net so you don’t have to worry about high-cost repairs for as long as you use the car.
On the other hand, if you buy and pay off the loan in a short period of time, you’ll be car-payment-free long before these costly repairs should arise, giving you time to cushion your savings. The question is: will you have the money when the time comes, or would a warranty be preferable?
How Much Do You Drive?
When you lease a car, there’s a cap on how many miles you can drive. If you go over that number, there are pricey fees tacked onto your bill. If you want the freedom to drive as much as you please, you should probably lean toward buying.
How’s Your Credit?
There are some car dealerships in Beavercreek Ohio that specialize selling cars to those with less-than-perfect credit. However, if you don’t have ideal credit, it can be tough to get approved for a lease. While it can be tricky to get approved for a new car loan, it’s often easier on used cars, it can be especially hard with leases. Remember, if you lease, it’s so important not to miss any payments. This would hurt your credit, just like with a traditional car loan.
Modifications and Upkeep
If your car tends to be spotless, dent-free, and you’re not into tinting your windows, leasing would work. If you tend to stain your seats, hit curbs and ding your wheels, scratch your doors, or even just want the freedom to paint your car a new color, leasing won’t work. Think hard about if you want to make modifications, or if you tend to be unlucky with little dents and things of that sort.
Does the idea of having a car that’s not actually yours bug you, or is it freeing? For some people, they want work towards owning that car they’re making payments on every month. For others, it’s a breath of fresh air not being tied to an expensive item long-term.
If you’re still not sure, there may be another way to have the best of both worlds. At the end of a lease, you get the option to purchase the car you’ve been leasing. This price is set at the beginning of the lease, so you know what you’re in for from the start. If you’ve grown really fond of the car you’ve been using the past several years, you can keep it. The fee is generally pretty competitive for a several year old car.
But you may want to keep it for other reasons. If you’ve caused damage to the car, gone way over on miles, or any number of other things, it may just make more financial sense to buy it.
This buyout is a great option to have, because sometimes you just don’t know what might happen.
Final Thoughts To Consider
When you lease, you’re paying for a car during the period it depreciates quickest. It’s true when you buy a car, the value drops quickly, but it evens out over the life of the loan. Buying a used car, just a few years old, can result in a pretty big discount as the bulk of depreciation has already taken place. But whether you buy new, buy used, or lease, it needs to be a choice that fits with your lifestyle and long-term goals. Keep an eye on your savings, your credit, your shopping trends, and your taste in cars.