To Lease or Not to Lease

One of the most popular questions from the consumer side of the automotive industry is, simply put, ‘to lease or not to lease’. The answer is, a little less simply put, ‘it depends’. Leasing could be the ideal option for some, but the opposite for others. Some won’t even qualify due to low credit scores, income, or other requirements that aren’t met. If, however, you do qualify, there are some key questions to ask yourself before deciding that leasing is the route best suited for you

You Should Lease if…

    • You’re the type of person to get bored of your car and want change after a few years
  • Well for starters, when you lease, you only pay for the monetary value that you’ve used the car for during your lease. Your monthly payments are lower when leasing because you’re only paying for the difference between the car’s total value and the car’s resale value. For example, if the car is worth $30,000 and the resale price after your 24-month lease is estimated at $23,000, you only pay the $7,000 difference throughout your leasing term – this is called depreciation. You also have the option of buying out your car after the lease is over for the remaining $23,000.When you buy a car, however, you pay for the value of the car in its entirety, regardless of how much you use it. You can purchase a car in cash upfront, or more commonly, with an auto finance loan. These monthly loans are typically 60% – 110% higher than monthly lease payments, and the car can later be sold for its depreciated value which is usually considerably less than the car’s initial cost.When you buy with a finance loan, you pay the entire $30,000 cost plus other finance charges. While you own the car at the end of the loan, its value is less than the $30,000 you originally paid — $7000 less.All in all, buying and leasing both have their pros and cons, and its important to consider all aspects of both options before embarking on either path.

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