Leasing vs. Buying a Car
Do you like driving a new car every two years? Or are you the kind of person who drives their car until the tires fall off? Regardless of how you prefer to get from point A to point B, you’ll get there smarter after this episode on leasing versus buying a car.
Join SAFE Cents host Mark, as he walks you through the pros and cons of car ownership compared to essentially renting a car.
- Car Loans and Leases: a Video Summary
Let’s say you decide you’re ready to drive something different. How would you do that?
Well, you could just find a car. Or, you could build a car. Technically, you could steal a car. That one’s probably still against the law, though.
Aside from that, you basically have two options. Leasing a car or buying one. Which makes the most sense for you?
Let’s let them duke it out! Before we can declare a winner, we have to ask some personal questions.
Personal question number-one: What’s your credit score?
Bottom line: You can have less than stellar credit and still buy a car. But you need excellent credit to lease one. If you don’t know your credit score, we’ve done a couple of videos on that topic. Check ‘em out.
Number-two: how much money you got? Leases are short-term – typically two to three years – and the payments may be lower than if you were to buy and pay off a car in that timeframe.
When you buy a car, terms can go out a lot longer to keep payments affordable. Then of course the monthly payments stop when the term ends because you’ll own it.
With leasing, you’re basically paying for the privilege of borrowing someone else’s car, so you’ll always have a monthly payment — at least until the zombie apocalypse.
Three: What are your car habits?
If you’re a neat freak who doesn’t drive a lot, leasing could be your thing. But if your most frequent passengers are half-empty water bottles and taco wrappers on all your cross-country road trips, you’re gonna want to buy. Most car leases come with mileage limits and a ‘slob tax’ if you bring it back messy.
In the bout between leasing versus buying, neither approach wins by a knockout. But buying probably edges out leasing in the judges scores — mainly because about 80 percent of Americans choose to buy their cars. So, which will you choose?
For more ways to keep your money safe and healthy, visit our Learning Center.
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