Difference between Leasing and Buying
Buying a new car is a lot different then getting a leased car in quite a few ways. One way in particular is the price as well as the freedom. Prices vary for leased cars but the overall savings versus spending can be determined in terms of a leased car costs to a purchased car. Another huge difference is the freedom one obtains while driving a car. The freedom of being able to do what ever, when ever to the car without having to report it. You have the option to add or remove enhancements and other items into the car; this is not allowed with a leased car.
If you have a good cash flow then most likely you will tend to buy your car verses leasing it because the costs are more favorable than when leasing every few years. However if your financial situation is a little less fluid you may wish to lease a car so that you can save some money. Most leases are about 2 or 3 years long and you will pay for a part of the car. This will keep the cost cheap and you get a new car in a few years. If you choose to buy your car with a loan from a bank or dealership, you will also pay a monthly fee only you will pay the car off for good. These payments will last as long as it takes to pay back the full price.
Length of Use
For individuals who lease a car, the contract lasts about 2 to 3 years. After this time, they have to return the car, pay for any damages and are presented with options to lease another one if they choose to do so. When an individual goes ahead and buys a car, it's theirs forever unless they wish to sell it. This however takes into consideration that the full loan may have not been paid off yet and the bank will become a part of the transaction. After you lease the car for a few years, you are usually allowed to buy the car if you wish. This is great for anyone who started off with a few bucks and now has enough money to do something with it.
A great pro for leasing a car aside is that the maintenance is handled. The money that you pay monthly for your leased car covers any maintenance fees or some fees if you get into an accident. When you buy a car with your own money or use a bank or dealership loan, you are responsible for paying the maintenance fees as well anything the insurance doesn't cover if you get into an accident.
Similarities and Differences
- A leased car can save you some money over the years, but if you intend on leasing for a very long time, you may inevitably spend more then you would on a bought car.
- The maintenance fee is covered with a leased car as opposed to an owned car.
- A purchased car is yours until you decide to sell it or get rid of it. A leased car needs to be returned with an option to buy at the end of your contract.