With the way the economy is today, it may be in your best interest to lease a car instead of buying it. Up until this year, buying a car would normally be the way to go. However, now, you have to look at the bigger economic picture to see why leasing a car is better than buying it, at least for the next couple of years.
Car Prices Are on the Rise
Car companies are producing fewer cars due to a slow down in the supply chain. This means the cars that are being produced are going to cost more. When you buy a car, the amount of depreciation over the first few years of ownership will affect your car’s value even before you have made your first few payments. Therefore, it may be a better idea to wait for a couple of years before you buy a car and simply lease until you are ready.
Leasing Vs. Buying
Leasing a car is a great option for those who don’t rack up a lot of miles each year. When you lease a vehicle, you have to pay a certain percentage as down payment and make monthly lease payments for a specific amount of time. Most leases are for three or four years depending on the terms you have agreed to. At the end of the lease period, you will have to return the vehicle and pay for any damages or excessive wear and tear.
The Option to Buy
At the end of your lease period, the dealership will give you the option to buy the vehicle at a discounted price. Most leases will indicate the purchase option price in your contract. If the contract does not list a buyout price, the dealership will inspect the vehicle inside-out and quote a price on what it would cost to buy it outright. If you decide to purchase the car, you will have to sign a loan agreement before you can keep it. If you decide not to buy it, you will have to return the car to the dealership and settle any outstanding amounts. Once the deal is complete, you can choose to lease another car or buy a new one.
Which Makes More Sense?
Every person’s situation is different. If you put a lot of miles on your vehicle every year, buying will probably be more beneficial for you than leasing. If you want to save money in the long run and you don’t put an excessive number of miles on the vehicle each year, then leasing may be the way to go. To know which option is best for you, look at your vehicle usage and your financial goals.
Buying car insurance for a leased vehicle is just the same as if you bought the vehicle. If you have questions about your auto insurance, call our agents at Lou Aggetta Insurance Inc. We have years of experience in providing the best customer service to our clients. Contact us today to find out how we can help you get the most affordable auto insurance coverage.