Lease vs. Purchase

When considering getting a new automobile, one of the dilemmas we face is the choice between leasing and purchasing. There is no straightforward answer, and the decision might depend on quite a few factors, like a personal preference, the length of the term required, financial situation, condition of a credit and so on.
Leasing a vehicle features many advantages, such as lower rates, no downpayment and saving on repair costs. It appeals to many people who rather not deal with used cars, like to switch to a new  car covered by warranty  every couple of years and don’t care about ownership.  In addition, short-term lease permits much lower payments than financing a Car Loan. However, it might not suit everyone’s situation. If you have a Bad Credit or No Credit, perhaps that option is not for you as leasing companies will not undertake Auto Financing since their risk is too high.

Financing for Auto Loan might be easier to obtain since its requirements are less restrictive than with leasing.  Usually, customers opting for buying are in for a longer haul. Although they have to invest more in the downpayment and are likely to have higher monthly payments, they actually own the vehicle when the loan is paid off.

In both cases - lease or buy, over the course of time, the customer will lose money at the same rate due to depreciation of the vehicle. However, upon repayment of a loan, the client has equity in the car which is its resale or trade-in value. With lease, there is also an option to buy-out the vehicle but, as a rule, leasing terms are more sophisticated and might have certain caveats, such as security deposit, acquisition fee or a lease-end disposition fee.
To sum up, Auto Financing decision must be carefully thought out after exploring variant avenues. It’s recommended to weigh such factors as a Car Loan Interest Rate, monthly payments, a size of the downpayment, insurance costs and other fees entailed in the Auto Financing agreement. There are tools available online, such as a Car Loan Calculator that allow buyers to get a breakdown of the fees expected in various financing plans. Once the details are clear and accounted for, the decision becomes much easier to make.