Deciding Whether to Buy or Lease a Car
The buy versus lease decision is a very important one, and in most cases the best choice is to buy. There is a significant amount of money wasted on car leases, and in most cases those car owners would be better off buying the car outright.
Car dealers love leases, and for good reason. Leases allow car shoppers to choose a more expensive car than they could otherwise afford, and that is of course good for the dealer. It can be bad for you, however, and it is important to understand the nature of leases, and why they are generally a bad idea.
Why people love leases
There is no doubt that leasing a car can provide the car shopper with a nicer car than he or she could otherwise afford. For those who crave the luxury of a BMW or a Lexus but have the budget for a Volkswagon or Toyota, a lease can be very enticing.
Buying a car as a status symbol is always a bad idea, however, and it is important to take a step back from your ego to determine what is truly important. Your overall financial health is more important than any car, and it is important to use proper planning and good logic when purchasing a car.
The alternative to leasing
Many car shoppers are under the mistaken impression that opting for purchase over lease relegates them to the cheapest models on the lot, but this is not the case. The most cost effective situation is often what smart shoppers refer to as the “new-used” option. The “new-used” option means buying a “nearly new” car and letting someone else take the depreciation. The average car can depreciate from 25% to 30% in the first year, making a year old car an excellent and very affordable alternative to leasing.