When shopping for a new vehicle, you have so much to consider. You’ve probably taken the time to search for the right make and model, as well as what features you want, an ideal gas mileage, and price. Did you know there is more to the price of a vehicle to consider? If you are one who likes upgrading to the newest item often, leasing a vehicle might be best for you. Let’s take a closer look at the benefits of leasing versus buying a new vehicle.
All About Leasing
You can think of a vehicle lease like a long-term rental. You don’t pay the full purchase price like you would if you were buying it. Many leases are for 36 or 48 months, and sometimes a down payment is required. The monthly payments for a lease are often lower than a purchase, too. Leasing a vehicle might be better for you, but it is still a large financial transaction. There are a few terms you should familiarize yourself with if you plan to lease. The capitalized cost, or cap cost, is the price of the vehicle and can be negotiated just like in a purchase. The residual value is the expected monetary value of the vehicle at the end of your lease term.
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Benefits of Buying
When leasing a vehicle, you don’t actually own it and there are restrictions. When you buy a vehicle, you have less to worry about. You don’t have to worry about the mileage you drive, you can customize the vehicle, and once the loan is paid off, you won’t have monthly payments. Whether you pay upfront with cash or negotiate a loan and payment plan, you still have the freedom of owning as long as monthly payments are made on time. Financing a vehicle is easier than leasing and most dealerships offer special financing for those with lower credit scores. You also don’t have to have a down payment to finance, either.
When you are in the market for a new ride, consider this information to determine which method is best for you.