Car buying has morphed over the last 50 years. Today, we buy new cars not because our old one is completely worn out but rather because we just want the latest and greatest. Like cell phones, cars have become throw away items and because of that, more and more people choose to lease.
Attorney Dan Blinn of Consumer Law Group who specializes in automotive finance recently shared some tips with Car and Driver and if you’re in the market for a new car this is a must read.
Why you should lease:
A lower monthly payment. Leasing wouldn’t exist if it wasn’t for the fact the payment is almost always lower per month. Most are attracted to that as it most immediately effects them. Blinn warns that if do decide to lease make sure there aren’t a bunch of hidden fees that could make it more expensive overall than buying.
You want the latest and greatest. Like buying the newest iPhone every year some car buyers need to have the most up to date technology in their cars. Leasing makes this easy as you can just turn the car in after the term and your not married to that old school CD player thingy sticking out of the dash.
You don’t drive much. If you don’t rack up many miles every year leasing may make sense. You can opt for a low mileage lease — say for 7, 500 miles per year — and save even more on the monthly payment. Be careful as if you do go over because you’ll get charged for the extra miles. This can add up and make for a very large unexpected bill when you turn the car in.
You know exactly how long you want the car. Leasing can be helpful if you’re a planner. If you know you won’t need to turn the car in early like for a job relocation or reduction of income it can be a great idea. If you aren’t exactly sure what the next 2-3 years are going to look like, buying may be for you.
You want a high end luxury car. Believe it or not, some of the best lease rates are on high end luxury cars. No, this does not mean an S-Class costs less than a Camry, but instead means the monthly payments are even lower compared to buying a luxury car.
Why you should buy:
You drive everywhere and put a ton of miles on your car. Most leases max out at around 15,000 miles so if you drive more than that you should buy. Like mentioned before, if you lease, and go over the mileage limit you get charged per mile. This is made to greatly benefit the dealer so you better believe it will be expensive.
You beat the crap out of your car. If you are the type to mistreat your car buying is definitely for you. When leasing they will charge you for anything more than normal wear. Dings, dents, scratches are all subjective and so they can charge for every little thing they don’t like. When buying its up to you when to get something that’s superficial fixed. Maybe you like the look of hail damage and the word “no parking” keyed into the side of your car.
You don’t care how old the car is. Going along with the last one, if you just simply don’t care much about new cars buying is for you. Its almost always cheaper to just hang on to your car and keep up with repairs and maintenance then to keep buying every few years. Buy a new car and run it into the ground.
You have no clue how long you want to stay in a car. If you’re not sure of your automotive needs in the future then buy a car. You can sell when ever you want and there isn’t a penalty. If the cars paid off you can walk away with some cash which is something a lessee has never been able to say.
There you have it, everything you need to know to make your decision. Hopefully this is helpful and good luck on your new set of wheels.