How To Compare Car Buying And Leasing Options

In today’s economy, comparing car buying and leasing options is an extremely important part of the car buying experience. Once you have gathered all of the information needed to make an informed decision, then it is possible to make the best decision for your automotive needs.

Researching
There are many different purchase and lease deal offers available today. With the downshift in the economy, automotive dealerships are anxious for customers to come to the dealership and comparison shop.

Before making your ultimate decision about what car to purchase or lease, you first need to evaluate what your automotive needs are. This includes what size car you need, what features you want the car to have, how many miles you anticipate traveling each year and your current credit rating.

Once you know all of this information, then you can begin to research different cars and models that meet your qualifications. You can research this information online by visiting model websites and by also reading car reviews from companies like Edmunds and Consumer Reports.

Comparing Options
With your research in hand, then you will be better able to compare the different advantages and disadvantages of both buying and leasing. When you talk to the car dealership, you should have prepared questions to determine which option will work best for you, but here is a basic overview of each approach.

Buying – The advantage of purchasing a car is that at the end of the finance term you will own the car outright. You will be able to determine what amount of insurance you carry on the car and you alone will be on the car title once you own it.

The downside of purchasing the car is that you take on the financial liability of car depreciation once you drive the car off the lot. Even if you decide to sell it the next week, you will be out the depreciation amount. The other disadvantage is that generally the monthly payments on a purchased car are higher than those of a leased car.

Leasing – The advantage of leasing a car is that the monthly lease amount is usually lower than the monthly finance payment for a car purchase. Another advantage is that if you want to enjoy a new car every few years, the term of a lease is usually only 2 to 4 years, at which time you will either turn the car in for a new one, (and a new lease), or decide you like the car so much you want to purchase it for the residual amount due.

However, the disadvantages to a car lease are that if you decide to purchase the car at the end of the lease, you will still have several years of car payments before you own the car. Also, while the monthly lease payments may be low, the insurance requirements can be quite high and expensive. Additionally, there are mileage limitations on a car lease that are not present with a car purchase.