To buy or lease a car is an important choice to make and should be made wisely. Luckily, if the determining factors are weighed evenly, it is fairly easy to arrive at the best choice. The factors to consider are your finances, needs, and future. There are several questions your should ask yourself before buying or leasing a car.
How much driving will you be doing?
If you travel often, take a lot of road trips, and have a long commute between home and work, or if you think you will be putting a lot of mileage on the car, buying a car may be wise. You should keep in mind that most lease terms only allow for mileage 15,000 miles a year or less. Any mileage over the set limit will receive high fees when the vehicle is returned. So, if you drive more than 15,000 miles a year, or think you will be, leasing is not a good option.
Do you have kids?
Please note that you must return a leased car and there are limits on the amount of ‘wear and tear’ that is acceptable, so you could accrue financial penalties if you cause too much internal or external damage. Because kids in general tend to be less careful and make more messes than most adults, you might want to consider additional insurance coverage in the lease terms. Or if you think damages could occur from using the car, that are more than normal due to kids or pets, you may want to buy a car because then you won’t have to worry about any additional charges.
Are you responsible?
If you take very good care of your belongings, keep things clean, and are conscientious about your actions, leasing would be a fine option for you. However, if you tend to lose things easily, are more casual or neglecting with your life and possessions, and are not careful to avoid mistakes, leasing could become a problematic situation, because car damages could occur that you might not be able to afford.
How much can you afford?
When considering this question, think about the present as well as the future. For instance, if you can afford to make higher payments now and you wish to have no payments in the future – out of preference or because you are uncertain about your financial situation in the future – then buying a car may be the better choice. On the other hand, if you are on a limited income and budget that doesn’t change much, and you can’t afford much of a monthly payment, leasing is your best bet.
Those are the main questions to ask yourself, and really think about, before buying or leasing a car. Make sure you are honest with yourself, think about the future, and especially, consider your income and financial situation. The goal is to avoid getting into a financial predicament, and to instead make the wisest decision for you and your household.