Cars are expensive, and their prices can be out of reach for many individuals. Even though long-term auto loans exist, it can get tough to acquire a vehicle. Luckily, car leasing allows people to drive a new car through a monthly payment typically lower than when purchased (Vincent). While the thought of buying a new car is exciting, the advantages and disadvantages of both buying and leasing new cars should be considered before making the final decision.
Advantages of Buying a New Car
When a person decides to buy a new car, they tend to be relieved from many worries. Firstly, there are no worries of exceeding the predetermined mileage or the expiry of the car’s lease. Secondly, there are no charges and additional payments for leasing a car when the loan term expires. The vehicle can retain an exceptional resale value. Furthermore, when a person can attain an adequate insurance cover, the decision to buy a new car has no implications financially in the long run (Honda Morristown). Finally, after purchasing or paying a car loan, an individual can customize the vehicle according to their choice and preference.
Disadvantages of Purchasing a New Car
Despite all the benefits of buying a car, it can be a financial burden when one decides to invest in a vehicle. Buying a car is associated with heavy initial down payments and subsequent installments that should be paid to build equity in a vehicle. Additionally, after the warranty has expired, a mechanical problem can attract massive amounts of money for repair (Honda Morristown). In addition, the car’s future value is unknown, making it risky since cars are prone to depreciation.
Pros of Leasing a New Car
When searching for a car to lease, a person does not have to worry about the enormous initial down payment when buying and other charges such as taxes and registration fees. Moreover, leasing can help lower an individual’s monthly expenditure since it does not involve the high monthly installments made on a purchased vehicle. The monthly payments made on a leased vehicle can be up to sixty percent lower (Vincent). By utilizing this option, a person stands a chance to drive the latest vehicle models after every two-three years. Furthermore, the comprehensive warrants that come with leased vehicles are very lucrative (Vincent). Usually, a comprehensive warranty for leased cars takes care of the costs associated with maintenance and repairs.
Cons of Leased Cars
One of the significant drawbacks of leasing is that a person does not own a leased car. Instead, they have to return the vehicle when it has completed its predefined mileage or after the agreement has been terminated. Consequently, if the person leasing a car terminates the lease before the contract has expired, the lessor can charge them an exorbitant amount as a fine for the same. In addition, if the car has undergone excessive wear and tear, the lease has to bear the cost of repairs (Vincent). Finally, a leased car cannot be customized according to the preference and choices of the person renting it.
While leasing a new car seems like a better deal, buying one is the ultimate wise decision that a person can make. Renting a car is a poor decision since the vehicle can be reposed at any time by the owner. Similarly, many economic risks are associated with leasing a vehicle, such as heavy fines when mileage is exceeded and repair costs if there is wear and tear on the vehicle. All these drawbacks can be avoided by purchasing a vehicle.
Works Cited
Honda Morristown. “What are the Advantages and Disadvantages of Buying vs. Leasing? | Hudson Morristown“. Hondamorristown.Com, 2021. Web.
Vincent, John M. “Buying vs. Leasing a Car.” U.S. & World Report News, 2020. Web.