Should I Buy or Lease?
When you lease a car, you don't own it. Instead you pay for what you use - the difference between the value of the vehicle when you take possession and its value when you return it. When you buy, you pay the full purchase price and you own the vehicle.You need to consider lease restrictions when making the decision concerning leasing or buying a vehicle.
Some restrictions that come with leasing are as follows:
• Maximum annual mileage limits
• Inability to get out of a lease and switch cars
• Not able to modify or upgrade the vehicle
• The lease requires you to take excellent care of the interior, exterior and working parts
In general, you will have lower short term costs if you decide to lease. You are able to get a nicer vehicle with a smaller monthly payment. However, the long term costs will be higher. In part, this is because you never own anything. By buying the vehicle you end up with something you can sell - allowing you to recoup some of your costs - or use until it dies. You may also have higher costs than you expected if you lease vs. buy the vehicle. If you exceed your mileage limit or have to repair cosmetic damage (that you could just live with if you owned the vehicle) your costs will rise.
Here are some factors to consider when you are considering leasing a vehicle:
• You need a new vehicle possibly for client travel
• You know that you can satisfy the lease agreement
• You take good care of your vehicles
• You do not drive more than 15,000 miles per year
Here are some factors to consider when you are considering buying a vehicle:
• You want to minimize long term costs
• You drive more than 15,000 miles per year
• You keep your vehicle a long time before replacing it
• You want the flexibility to buy and sell the vehicle at any given time
If you have any further questions on whether you should buy or lease your next vehicle, give us a call at 740-342-5146. Just ask for the Finance Department.
*Information provided by banking.about.com