New car buyers are usually faced with two options when they decide to purchase a new car : to buy the car or to lease it . For most families and individuals , purchasing a new car is usually a very big decision that has a significant financial setback . Car dealers usually present car buyers with two options when financing a car purchase : to buy or to lease . While both options cost money both in the short term and the long run , leasing is generally easier on the pockets .
On the other hand , leasing does not transfer ownership to the owner , essentially giving the owner nothing of value at the end . What are the advantages and drawbacks of buying as compared to leasing ? What are the situations wherein leasing is the best option for a car buyer ? Leasing a car is cheaper than buying a car based on the monthly payments . Buying a car means that the buyer will have to pay for the entire cost of the car .
Usually , this is done in monthly payments over many months with the monthly payments worth more than the cost of the car divided over the payment term .
As the length of the term increases , the increase in Additionally , the owner has to pay the down payment and other costs associated with the ownership of the car . Leasing is more similar to renting where the owner just pays to use the car for the length of the lease term . At the end of the lease , the owner must relinquish the car back to the dealer . While this leaves the buyer with no car at the end of the term , the monthly payments are much less than the payments for buying a car .
This is because instead of having to pay for the cost of the car divided over the length of the term (plus interest , the owner only has to pay for the loss of value of the car during the lease period . A lease is cheaper in terms of monthly payments but buying a car gives the owner possession of the car after the last monthly payment . Thus it is obvious that the eventual ownership of the car is important when choosing between buying and leasing . Buying a car will eventually give the owner a sense of ownership .
Because the car is also under the buyer ‘s possession , it adds to the equity of the buyer . At the end of the lease term , the person availing of the lease has nothing to show for all those monthly payments . If a person decides to get a lease , he or she will have to avail of another lease once the lease term ends if he or she is to continue driving . For the buy option , monthly payments to the dealer stop when they have fully paid for the car . However , that does not mean that the owner ‘s payments on the car stop when the term ends . Usually , by the time…
Cite this Buying Ves Liesing a Car Comparasion and Contrast
Buying Ves Liesing a Car Comparasion and Contrast. (2018, May 30). Retrieved from https://graduateway.com/buying-ves-liesing-a-car-comparasion-and-contrast/