Don’t let hindsight get the best of you when leasing or buying.

Buy a car, or lease it? For many, the answer is simple, but depending on your situation and needs, it might make more sense to lease, or no sense at all. Let’s take a look at leasing’s pros and cons to see how it might suit you.

The Pros Of Leasing A Car

Leasing a car is much like renting an apartment. You take posession of the property, but somebody else, usually the dealership, still owns it, and is responsible for major repairs. In return, you agree not to trash it, make any enormous changes to it, or wear it out. You are locked into a set of monthly payments until you hit the end of the lease.

The big difference between cars and apartments, though, is that at the end of your lease, you can choose to buy the car you have, or turn it in, obligation-free, and lease a new one. As a rule, more expensive cars are cheaper to lease in the short term. With a lease, you may not have to make any sort of down payment; if a down payment is required, it may be less than what you would be expected to pay when purchasing a new car.

The Cons of Leasing

That said, a car lease can feel surprisingly restrictive. It is worth remembering that leases exist, as far as dealerships are concerned, to offer them a stable supply of used cars. As a result, for example, mileage is limited on leases, usually 12,000 miles a year, although sometimes it can be less. Like an apartment, it is not money going towards some form of ownership; once you hit the end of the lease, you give back the car. If you choose to buy it, it is unlikely all the money you have spent on the lease to that point will apply to the car. There may be some cars and leases where the math works out to essentially what you would have paid if you had bought the car when the lease started, but this is rare.

It is also harder to get out of a leased car if your driving needs change. Again, it is not unheard of, and in certain situations you can simply give back the car and be done with it. Before you sign for any lease, you should read the documentation carefully, and ask detailed questions. The legal language and financing of a lease are very different from buying a car, and that might trip up otherwise experienced car buyers.

Make the right choice for your wallet!

Who Should Lease?

The best scenario for leasing is a driver who needs a nicer car for work. In fact, leasing work-related vehicles is a fairly common tactic and is often the best way to get a luxury vehicle you need for your job. You might even be able to write the lease off on your taxes, depending on how you use the car.

Similarly, if you are only living in an area for a few years for work or school, and do not need to take a car with you when you leave, or do not want the financial commitment after you are done, leasing a car can be a good way to have wheels without the financing problems.

To sum up, it is wise to look closely at your financial situation before buying or leasing. If you only need to have a car for a while, leasing may be right for you. To get more in-depth information about leasing or buying a car, start with research from CarFoundMe.