The average American trades cars every three to four years. It's a common dilemma: to lease a car or buy a car - which is better? Everyone who has ever considered leasing has had this question cross their mind. After all, our parents always purchased a car; isn't that what we are supposed to do as well? The answer is - it depends. It's not possible to simply say that one is always better than the other because the answer depends on the specifics of each individual situation.
Simply put, leases and purchase loans are two different methods of automobile financing. A lease finances the use of a vehicle; the other finances the purchase of a vehicle.
If you typically keep your vehicle for five to 10 years, then financing may be your best option. The following are some additional benefits to financing:
Pride of Ownership
Ownership can instill a sense of pride and long-term value.
No Restrictions on Mileage
This is important to consider if you drive more than 12,000 to 15,000 miles per year.
Make Changes to Car’s Appearance
You can alter the interior or exterior to compliment your taste, though your choices may affect the resale value.
In a lease, you do not purchase an automobile. You contract to use it for the first, and best, period of its life. Following are some additional benefits to leasing.
Lower Monthly Payments
If the finance period is the same, your monthly payments will be lower when leasing than financing because your payments will be based on the vehicle's estimated depreciation.
A New Car More Often
Your taste and preference may change, and a short-term lease makes it easy to drive a new car more frequently.
Guaranteed Future Value
You don’t have to worry about resale value. At the end of your lease term you can turn it in or buy it to keep or resell.