Is it Better to Buy or Lease A Car?
So, you want to learn about buying versus leasing. For starters, there are various things you'll want to take into consideration, especially the pros and cons. Each financing option is tailored to a specific type of driver. Particular characteristics would make one person lean more towards one option, rather than another. If you're wondering which option is better for your financial situation, you've come to the right place. Here are the pros and cons of both alternatives:
What are the benefits of buying a car?
Pros & Cons of Buying
Pros
- You can pass it on. There are many different options available to car owners. You can value your trade and possibly sell it back to the dealership or a private seller. You can pass it to your children or your children's children (assuming you kept up with its oil changes).
- Personalize it. If you own or finance your vehicle, you're welcome to do as you please with its interior/exterior design. If you want to paint your vehicle bright purple and throw polka-dots all over it, you can!
- No mileage requirements. Since this is your car, you can drive it however far you need to. If you have a 25-mile work commute each way, then financing might be the best option for you.
- Make an investment! You never know, you could have a future classic-car on your hands. When you purchase a vehicle, you're investing. Whenever you pay off your car loan, the car's value will add to your assets.
Cons
- Depreciating value. If you don't take care of the vehicle, the value can go down immensely. You can very quickly be at a loss when you buy a vehicle and don't maintain it.
- Service requirements. Since you're the sole owner of the model, even if you're financing it, you have to take care of the maintenance. Unless you're wise enough to purchase a Lifetime Warranty, you might be footing the bill for some expensive repairs later on.
- Negative Equity. Negative equity is something that can happen when you either have bad credit or purchase an over-priced car. If your car loan amounts to much more than what the car is worth, you'll be responsible for the negative equity when you handle a trade-in. You might also have a hard time selling it if you attempt to sell for the full price, leaving you at a loss. To avoid this, make sure that you shop at well-priced Honda dealers like us!
- Long-term agreements. While you can set up a loan for a short-term, generally, people don't do this. If you signed up for a 72-month loan agreement to keep payments loan, you're locked into that agreement until you trade-in or pay it off.
