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To Buy or Lease a New car?

In today’s world, there are many topics that can creat a heated debate. Politics, animal rights and foreign policy are just a few. However, one that hits a little more close to home, is the subject of buying versus leasing a new car.

According to a recent survey, approximately 23% of the auto market is made up of leased vehicles. However, this large variance does not dictate which option is better, due to the fact that many businesses lease vehicles.

When considering your next auto purchase, how can you decide which path is the best to take? Here are some points to consider when you are thinking about leasing:

1. Lower payments: Lower payments aren’t the only reason to lease. Leasing also offers purchasing flexibility.

2. A worry-free drive: Drivers who lease do not have to worry about watching the value of their car drop every year or deal with hefty repair bills. At the end of the lease term, they can simply turn in the car and walk away.

3. Ongoing monthly payments: While leasing is convenient, you end up having to continue making some kind of monthly payment. When you buy, however, you will pay off the loan at some point.

4. Mileage. Most leases have a cap on how many miles you can put on a car before you get hit with a mileage charge, which adds up very quickly. If you drive more than 15,000 miles a year, a lease is likely the wrong choice for you. (I personally put on 20,000+ miles per year)

5. Gap Insurance. If you lease, make sure you consider GAP insurance. GAP stands for “Guaranteed Auto Protection”, and it represents the gap between what you owe at the time the car becomes history, which can be tens of thousands of dollars. This insurance pays off the lease balance if your leased car becomes stolen or totaled.

Hopefully this little bit of incite helps you when making the lease or buy decision.

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