Financial Audit: Leasing vs Buying an Automobile
If you're in the market for a new vehicle, the first decision you'll have to make is whether to lease a vehicle or buy it. Whether you run a business that has commercial vehicles or need a vehicle for personal use, there are many things to consider. For instance, commercial vehicles will likely get more use and rack up miles. On the other hand having older vehicles means that you have to make repairs such as removing a police siren, if you've bought an old police vehicle. Listed below are a few of the pros and cons to leasing versus buying a vehicle to help you make a decision that best suits your needs.
Most leases have a cap on the amount of miles you can accrue during the 2-year term. If your commute to work consists of just a few miles each way and you rarely drive long distance, leasing can prove to be a better option. When you lease a vehicle, you gain access to the newest cars or trucks on the market. And, this means that you can afford to drive a car that if you had to purchase, would not be in your price range. The best part is, you can do this every couple of years and always drive a nice car. A lease doesn't require state taxes and a large deposit upfront so you can drive off the lot without emptying your pockets.
Repairs to vehicles can become quite costly, however, if you are savvy with cars and know how to repair your automobile yourself, that significantly reduces costs. For example, you can purchase your own exhaust system online at AutoAnything and make repairs yourself without the additional service cost of taking your car to the dealership. However, it’s important you are aware of the dealerships policies regarding making repairs yourself on a leased vehicle versus owning the vehicle.
On the other hand, if you travel an hour or so each way to work and enjoy taking long drives several times a year, a lease may not be cost effective. While you can go over the allotted miles for the 2-year term, once you exceed the number of miles you'll have to pay for every additional mile over. This money comes out of pocket and the penalty can be quite steep. You're responsible for the condition of the vehicle, too. This means that you must take extra care not to spill anything or damage any section of the vehicle while it's in your possession. When you lease a vehicle it's true that the payments are much lower than a purchase, however, they don't end. So you never get away from a monthly car payment until you buy. Leasing a vehicle also requires good credit, and if yours is less than desirable, you will have trouble getting one.
There are pros and cons to leasing and buying. Before making the final decision, take into consideration all the options for both and then weigh them carefully. Then you'll know that the final verdict is the one that's most cost-effective, convenient and beneficial to your particular needs.