When it comes to purchasing a car, there are two main options: buying or leasing. Both have pros and cons, and it’s important to weigh them before making a decision.
You should lease a car if…
1. You want to pay as little as possible up front
Leasing a car typically requires a smaller upfront payment than buying a car outright. A car lease can be a good option for those who don’t have a large sum of money saved up for a down payment.
2. You’re confident in your credit history
In order to lease a car, you’ll need to have a good credit score. This is because leasing a car is essentially borrowing money from the dealership or leasing company to pay for the use of the car. If you have a good credit score, you’re more likely to be approved for a lease and get a better deal on the terms of the lease.
3. You’re not paying for a mortgage
If you’re already paying off a mortgage or other large debts, it might not make financial sense to take on another large payment in the form of a car lease. In this case, it might be better to buy a car outright or opt for a more affordable financing option.
4. You don’t travel a considerable amount of kilometres
Leases typically have kilometre limits, so if you drive a lot, there might be better options than a lease. If you only use your car for short trips or have access to other forms of transportation, a lease might be a good fit.
5. You can claim your car as a business expense
If you use your car for business purposes, you may be able to claim the costs of leasing it as a business expense on your taxes. This can make leasing a more attractive option.
6. You’d like to replace your car every 2-3 years
Leasing a car allows you to upgrade to a newer model every 2-3 years, which can be appealing if you like to have the latest and greatest technology in your car.
You should buy a car if…
1. You’d rather pay more upfront to shrink your monthly payments
If you have a large sum of money saved up, you may be able to use it as a down payment to reduce your monthly car payments. This can be a good option if you have a tight budget and want to keep your monthly expenses as low as possible.
2. You’d rather your credit history go un-scrutinised
Buying a car doesn’t require a credit check, so if you have a less-than-perfect credit score or don’t want to risk damaging it further, buying a car might be a better option.
3. You have a mortgage
If you’re already paying off a mortgage or other large debts, it might make more financial sense to buy a car outright and avoid the additional monthly payments of a lease.
4. You drive a lot of kilometres
As mentioned, leases typically have kilometre limits, so if you plan to drive a lot, buying a car might be a better option. This way, you won’t have to worry about paying extra fees for going over your mileage limit.
5. You can’t claim your car as a business expense
If you can’t claim your car as a business expense on your taxes, leasing is not the most cost-effective option. In this case, it might make more sense to buy a car outright or opt for a more affordable financing option.
6. You would prefer to keep your car longer than three years
Leasing a car means you’ll have to return it after 2-3 years, at which point you’ll have to start the process over again.
In conclusion, whether you should buy or lease a car depends on your individual financial situation and priorities. Leasing a car can be a good option if you want to pay as little as possible upfront, have a good credit score, don’t have a mortgage, don’t drive a lot, can claim your car as a business expense, and want to upgrade to a newer model every 2-3 years.
On the other hand, buying a car might be the better choice if you’d rather pay more upfront to shrink your monthly payments, don’t want to undergo a credit check, have a mortgage, drive a lot, can’t claim your car as a business expense, or you want to keep your car longer than three years. It’s essential to carefully consider your options and do your research before making a decision.
Regardless of whether you lease or purchase your next pride and joy, you’ll need
an independent, reputable and reliable mechanic to service your vehicle! Contact the experts at Sutherland Automotive!