This is part of Glossary of terms for car buyers. series breaks down all the terms you need to know if you buy a new one or old car from one authorized dealer.
One of the biggest questions auto buyers consider is, should I? lease or buy? Here are some tips to figure out which one is right for you.
Lease
Renting a car is like renting an apartment. You sign a contract, paying a fixed price, including a fixed number of miles, for a fixed period of time. Your monthly rental payment depends on a number of factors, including the price of the vehicle and the amount of your down payment. As a general rule, it’s cheaper to rent per month than buy, all else being equal. You can also consider a one-time lease. Paying your entire lease at once can save you significant fees, but you’ll need to have cash on hand. It’s not for everyone. Rent is cheaper because you won’t keep any equity. For better or worse, when the lease expires, you simply pay for any damage or average mileage, then return the vehicle, unless you buy it back.
Buying
In contrast, funding for buy a car higher monthly results loan payment then rent it out, but in the end you will own the car outright. You can only rent at sellerbut you can get Auto loan at your local bank or credit union, and you can often get a better deal. Know your credit score, shopping loan rate and get pre-approved before going to the agent. Check Loan Calculator on Auto Diary to explore your loan payment options.
So what do I have to do?
Both options have their pros and cons, so here are a few tips to help you make your decision.
Advantages of renting
Renting can be a good option if…
- You don’t want to spend a lot of money
- You want a new car regularly
- You are okay with having one car expenses
- You drive less than 15,000 miles per year
- You usually keep your car in good condition, undamaged
- You are eligible to cancel the lease
Buy Advantages
Financing to buy a car can be a good option if…
- You can afford a higher monthly payment
- You drive a lot
- You don’t need a new car often
- Your car tends to have a few scuffs and scratches
- You want to stop paying at some point
With these tips, you’ll have a better understanding of whether renting or buying is the right move for you. Visit Autoblog.com to learn more.
