You finally found the perfect ride. Great safety rating, sleek interior, and a fresh new coat of paint. Everything you need to rev your auto shopping engine is almost ready to go. Aside from the aesthetics, you still have one major decision to make: should you lease or buy? ScoreShuttle is breaking down the must-know car shopping facts to consider before you lock in an auto deal.
For those with excellent credit, leasing a vehicle gives you the perks of driving a new ride, minus the high payments of ownership. The downside? Instead of having the shiny carrot of no longer having a car payment to look forward to – most drivers end up going from one lease, straight into another. Here are the pros and cons.
- Low monthly payments.
- Since payments are typically less than buying – you may be able to afford a nicer model.
- Maintenance can be negotiated in most leasing packages.
- You can upgrade (or downgrade) every few years as your needs and budget change.
- You don’t own the vehicle. Technically you are just borrowing it from the dealership.
- No breaks from car payments. When one auto lease ends, another typically begins.
- Restocking fees. If you choose not to lease again, some dealerships may charge you a fee just to return the car.
- Extra charges. If you go over your mileage or damage the vehicle, you may get also dinged financially.
Buying a new vehicle has its own set of perks and downfalls. Post payoff, you can enjoy the freedom of car ownership. However, depreciation and maintenance fees may end up costing you more in the long run.
- Once paid, you own the vehicle.
- Want to add rims? How about a new color? All changes and repairs can be made at your discretion.
- If the vehicle is kept in good shape, you can go anywhere from 1 to 10+ years post payoff with no car payment.
- In most cases, your credit score doesn’t have to be as high as it typically does with a lease. That said, good credit is still required for most lenders to give you the green-light.
- Monthly payments are typically higher than leasing.
- You may miss out on the latest updates and safety features of newer models.
- On average, cars depreciate about 15% per year. If you add in high mileage and wear and tear, you may not get a ton of bang for your buck when you sell or trade in.
- Oil changes, repairs, and the cost of a potential breakdown may fall on your shoulders.
In addition to the pros and cons above, there are some personal variables to consider before choosing the best route for you.
Your Credit Score
A high credit score could open up the doors to more purchasing options and may qualify you for a lower interest rate. If you’re not at the number you need to get a solid deal, the ScoreShuttle software may be able to help. To give your credit score a boost, click below to get started.
The second factor to consider is how often you drive. Most leases allow anywhere from 8,000 to 15,000 miles per year. The average driver uses about 12,000. For light drivers, leasing can give you the car you need, for just the right amount of driving time you actually use. For heavy drivers (15,000+ miles per year) the added cost of high mileage fees may mean buying is your best bet.
Type of Vehicle
If you’re looking for a basic model, then it really just depends on your personal preference when it comes to the information above. If luxury is more your style, the higher payments and upkeep cost associated with more expensive brands may steer you towards a lease.