Getting a new car is a big financial event. Many people have two options: buying or leasing a car. However, not everyone knows the difference between these options. It’s essential to understand the pros and cons of both choices when it’s time for a new car. Let’s take a closer look at whether buying or leasing a car is better suited for you.
Buying Leads to Ownership
Buying a car can be both good and bad. If you want to own a car, then buying with a car loan is usually the way. Nowadays, the average car price keeps rising, so most people do not pay the entire cost upfront. As a result, a bank will extend a loan to the buyer through monthly payments. Buyers can reduce the cost of the loan with a down payment.
But Leasing Means Smaller Monthly Payments
Because leasing the car involves a contract with a set time limit, the driver is not paying with the intent to own the car. Usually, this means that the driver will have a lower monthly payment than if they were to buy the car. In fact, many people prefer to lease because it gives them access to a car they could not afford to buy.
The Lease Terms
Although a lease can mean smaller payments, there are some drawbacks. The lease is often for a specified time, after which the driver turns the car back in. As a result, the driver is essentially paying for the use of the car but will not be paying toward ownership in most lease cases. In addition, many leases only allow the driver to stay within a set number of miles. If you go over that limit, you will have to pay extra.
The Value Over Time
When you buy a car, it begins to depreciate right away. In fact, it will continue to lose value in most cases, although regular maintenance can slow that loss. However, when you lease a car, you do not have to worry about losing value. But leasing a car doesn’t mean you can do whatever you want to the car. Maintaining the car and keeping the inside and outside in good condition is vital. If there is a lot of damage, you could be on the hook for very steep wear and tear charges.
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Understand Your Options
Not every car loan is the same, and lease agreements can vary, too. The most important thing is to talk to the dealership about both options to make an informed choice. At Bob Brady Hyundai in Decatur, Illinois, the sales staff can review both options and help you find what will work best for you. Make an appointment today to talk about buying or leasing your next Hyundai.