Should You Buy Or Lease A Vehicle

To buy or to lease, that is the question. There isn't a single right answer, though. Whether you choose to buy or to lease your next vehicle is a matter of personal preference. There are advantages to both buying and leasing. There are, of course, also disadvantages for both options.

The advantages of buying a car are fairly obvious. When a buyer purchases a vehicle and pays the monthly car note, he is increasing his equity in the car. More and more of the value of the car belong to him. Once the car is paid off, it is all his to do with as he wishes. He can keep it, sell it, trade it, or give it away. And, he can keep the car for as long or as short a period of time as he chooses. There is no time limit involved when a car is purchased.

The disadvantages of buying a car are also fairly obvious. Cars, as a rule, do not appreciate. It's been estimated that a car loses about a third of its value the minute it is driven off of the car lot. So even though the buyer is gaining equity, the vehicle is losing value. The buyer assumes full responsibility for the car when he buys it.

Leasing a vehicle is a good idea for people who do not intend to put a lot of miles on a car each year and to whom it is important that they drive a new or nearly new car all the time. Leases are for a pre-set period of time, usually a year or two. The lessee drives the car for that period of time and then gives it back to the dealer. The dealer assumes any loss in value.

The main disadvantage of leasing a car is that the user is gaining no equity in the vehicle.

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