Shopping for a new vehicle can be a hassle for many of us. Part of this stress can come from the confusion between whether to lease or buy a vehicle. Each option comes with its own pros and cons, particular to your needs. So, let’s take a look at them to help you device whether leasing or purchasing is better for you!
Short Term vs. Long Term
A key difference between leasing and buying is whether you prefer a short-term or long-term investment. Leasing durations typically last between 2-3 years. When you lease a car, you’re never paying towards ownership, though there may be the option to purchase at the end of the lease. While a lease can make it possible for you to afford a nicer car with state of the art features you otherwise wouldn’t be able to afford, your mileage is often restricted annually and at the end of your lease term you may have to pay wear-and-tear fees. On the other hand, purchasing a car means you have a guaranteed investment and secure means of transportation for as long as the vehicle is functional. When purchasing, every payment goes towards making the vehicle a little more yours. Of course, once your factory warranty expires, you are responsible for maintenance and service costs. Remember, with a purchase, you are signing yourself to a long term investment that will depreciate in value.
Assess Your Personal and Professional Needs
If having a new vehicle every few years is important for your profession, then leasing may present an attractive opportunity. On the other hand, if you need a reliable source of transit for your family, or want a vehicle that can accommodate activities such as road trips, you may be better off purchasing. Your recreational needs might not be met with a leased vehicle due to the mileage restrictions and high wear-and-tear costs that can inevitably arise when traveling long distance. Those who chose leases will be better served by traveling shorter distances at a time, while those making purchases should remain aware that with the freedom of owning your own vehicle comes the responsibility of footing and the bills for its upkeep.
What Are The Financial Differences?
It’s not simply a matter of life style and investment, but also one of finances. Leasing presents you with the opportunity to drive a new vehicle every few years typically at lower monthly payments. Additionally, the down payment is often small, if there’s even one at all. However, leasing agreements can also strap you for additional payments that you may not force. As mentioned earlier, wear-and-tear charges are often at the dealer’s discretion. And, if for any unexpected reason you terminate your lease early, you could be responsible for costly termination fees.
Those who choose to buy their vehicles can be faced with higher monthly payments and significantly larger down payments. If you decide a few years down the line you want to exchange or sell your car, you’ll be faced with a depreciation of its value. However, in the long term, purchasing a car tends to keep more money in your pockets. At the end of the day, each payment is also going towards ownership allowing you to do with the vehicle as you please.
Visit the Baltimore County Employees Federal Credit Union
If you decide to purchase your next vehicle after considering the above options, your Credit Union is here to help you with affordable Auto Loan Financing! Remember, it’s the people who are the real heart of the Credit Union with personalized service from friendly staff, loyal members who utilize many cost-saving services, and dedicated volunteers who work to make the Credit Union a success. Stop by one of our three branches to learn more about your Credit Union and its vehicle lending program…. It’s where you belong!