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When you tell a friend or family member that you want to lease a car available at Lease Cars, they might look at you and roll their eyes before telling you why buying is always a better option. Many people assume that leasing a car is like throwing away money. When your lease ends, you can buy the car outright, but most people trade in the model on a newer vehicle. Both buying and leasing have some benefits, but you need to look at your income and other factors before deciding which one is best for you.
When Leasing is Better
Leasing is usually a better option when you make a smaller amount of money. Lenders look at your income, employment history and credit score before deciding if you qualify for a loan. If you have a lower credit score, you’ll likely need a larger down payment. With a poor or very low credit score, lenders might deny you a loan. When you lease a car, you can put down a smaller down payment on the car. Most dealers will let you lease a car with a down payment of around £1,000.
You also need to think about how much you can put towards your monthly payment. Buying a new car might come with monthly payments of around £400.00 to £500.00, while leasing a car costs £300.00 or less. Leasing is also a good choice for those who like having the newest and hottest cars. Most leases only last for two to three years, and at the end of your lease, you can turn the car back over to the dealership and sign up for a new lease.
When Buying is Better
Buying is a better choice when you want to invest in your car. After making your last payment, you own that car free and clear. You can sell it to someone you know, sell it to a dealer or even use it as a trade in on a newer model. Buying is also a better option if you can’t fulfil the requirements of the lease. Leases usually have restrictions in place regarding the miles you put on the car. If you go over the maximum amount, you’ll face steep charges for the extra miles. Those who use their cars frequently for vacations and work often find that buying a new car is better than leasing one.
Leasing a new car comes with smaller monthly payments and requires a lower down payment than buying a new car. Depending on how often you use the car, what you want to do in the future and your credit score, you’ll likely find that one is better than the other.