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15 Reasons Why It Is Better To Buy A Car Than Lease One

http://www.carbay.ph/en/advisory-stories/car-category/tips-to-successfully-sell-your-used-car-2 Source: Carbay.ph

Buy or lease? That is the question confronting car owners today. And while the sales people at a dealership will always push a lease on their customers, research shows that, in fact, it is better to buy and own a vehicle outright than to lease one. Sure, people can have access to a new model car every few years when leasing, but the terms and conditions that accompany a lease are often restrictive, punitive and downright expensive. In the long run, buying a car, truck, mini-van or sport utility vehicle and paying it off makes more financial sense. Here are 15 reasons why it is better to buy your next car than to lease it.

15. Eventually the Monthly Payments Stop

Car dealerships favor a lease because, essentially, a lease amounts to never ending monthly or bi-weekly payments. When one lease ends, the dealer puts you right into another lease—ensuring that the payments continue. The most obvious benefit to buying a vehicle is that you will eventually pay it off and then get the satisfaction of driving it without any monthly payments. As a general rule of thumb, people should buy a car that they will be able to pay off in three years or 36 months. Then, keep the car for at least eight years, and drive it for five years payment free. Leases may provide lower monthly payments, but those monthly payments never stop, making them a trap for people.

http://halfapayment.com/best-ways-to-pay-off-a-car-loan-more-quickly.php Source: Halfapayment.com

14. You Can Sell a Car You Own for Money

When a lease term ends, people return the vehicle to the dealership and get what in exchange for it? That’s right, nothing. However, people who own their car outright have an asset that they can sell for money or a down payment on a new vehicle. Sure, a car is a depreciating asset and is never worth as much as you paid for it, but it is still worth something. After driving a vehicle for seven or eight years and putting more than 150,000 miles on it, people can still sell that car for thousands of dollars, depending on its condition and needed repairs. Selling a used car that you have driven without payments for several years for $5,000.00 is still better than returning a leased vehicle to the dealership and getting nothing in return.

http://www.carbay.ph/en/advisory-stories/car-category/tips-to-successfully-sell-your-used-car-2 Source: Carbay.ph

13. You Can Drive a Vehicle You Own as Much as You Want

When people buy a car, they are free to drive it as much as they want. Whether they drive 15,000 miles a year, 30,000 miles a year, or more. It doesn’t matter. But with a lease, the number of miles a person can drive each year is capped. Most leases limit the number of miles a person can drive to between 12,000 and 15,000 per year. Go over the limit and people find themselves paying hefty fees to the dealership that leased them the vehicle. The annual mileage limit is in place to protect the dealership and ensure that they can lease the car again once it is returned, or turn around and sell it second hand. The lower the mileage on a vehicle, the more money the dealership can charge for it. However, this does nothing for the person who is leasing a car, except make them worry constantly about how much they are driving.

http://relaxandjourney.com/fly-drive-enjoy-road-drive/ Source: Relaxandjourney.com

12. There Are No Early Termination Fees When You Own a Vehicle

Car salesmen use price to sell people on a lease, noting that the monthly costs of a lease are almost always lower than the monthly payments to buy a car outright. However, what these salesman frequently forget to mention are the fees charged in the event that a person has to terminate the lease early, or before the set end date of that lease. And the early termination fees can be extremely high. In fact, in most cases, the early termination fees basically require a person to payout the remainder of the lease all at once. That means that if a person ends the lease early, the early-termination charges are as costly as sticking with the contract. By contrast, a person who owns a car can sell or trade in that vehicle at any time. And money from the sale can be used to pay off any loan balance on a vehicle that is purchased rather than leased.

http://www.newroads.ca/blog/tag/newroads-national-leasing/ Source: Newroads.ca

11. People Who Lease a Vehicle Are Responsible for the Wear and Tear

Own a car and you won’t have to worry about the wear and tear on it—either from driving it or that comes with age. Although the wear and tear may cause the resale value of the vehicle to depreciate. But, in a lease, the person who is leasing a car is responsible for the wear and tear. And you can bet that a dealership will make their customers pay extra charges for wear and tear that is considered excessive or above normal usage. These charges are not cheap, and a lot of dealerships put their customers on the hook for any and all wear and tear on a vehicle. Normal wear and tear is subjective and open to debate, meaning that the dealerships can slap people leasing a car from them with these extra fees as they see fit.

https://www.freecreditscore.com/blog/auto-loan-early-payoff-calculator/ Source: Freecreditscore.com

10. People Can’t Customize a Leased Vehicle

Want to modify the car you’re driving? Thinking of putting on some new rims or upgrading the stereo? There’s no way you can do either of those things when leasing a vehicle. Own the vehicle, and it is yours to do with as you want. Change the paint, add a sunroof, slap on a nice spoiler. But if you lease a car, you can’t modify it in anyway unless you want to incur huge fees and fines. Because the lessor (the dealership) wants the vehicle returned in sellable condition, any modifications or custom parts added will need to be removed before the car is returned. If there is any residual damage, you’ll have to pay to have it fixed and it won’t be cheap.

http://cartech.about.com/od/Car-Audio/ss/Newbies-Guide-To-Car-Audio.htm Source: Cartech.about.com

9. The Upfront Costs Are Often Higher When Leasing a Vehicle

Most car salesmen are pretty shrewd and they often tell customers that it is easier and cheaper for them to get into a leased car than to purchase one. But hang on a minute. When a person buys a car, they typically pay upfront costs that include a down payment, taxes and registration fees. In comparison, a person who leases a vehicle typically makes the first month’s payment, as well as a refundable security deposit, a down payment, taxes, registration and other fees associated with a lease such as a “lease initiation” fee. Add these up and the upfront costs associated with a lease are often significantly higher than simply buying a vehicle. It never hurts to do the math.

http://brands.aliexpress.com/en?alpsm=true&sms=sughot&sms_type=default&aff_platform=promotion&sk=AeAE6q7a2%3A&cpt=1450724783650&aff_trace_key=275539b09db945d7a37fe73c46e65a92-1450724783650-04428-AeAE6q7a2 Source: Brands.aliexpress.com

8. People Who Buy a Car Can Finance the Purchase in a Number of Different Ways

People who buy a car have a number of options to finance that purchase, and they are not beholden to the dealership where they found the vehicle. These include financing with the dealership, a private bank, a personal loan, or by paying cash. In contrast, people who lease a vehicle are stuck dealing with the dealership for the duration of the lease period—typically two to four years. They have no other options. And the relationship between a customer who is leasing a vehicle and the dealership that holds the lease often changes once the paperwork is signed. Folks who buy a vehicle can walk away from the dealership where they found the car and never have to deal with those people again unless they want to.

https://www.autoloansolutions.ca/blog/a-small-change-in-financing-terms-can-mean-big-savings/ Source: Autoloansolutions.ca

7. Interest Rates on a Lease Are Higher

People who choose to lease a car or other type of vehicle still pay interest on their monthly payments. And, in the case of a lease, the interest charged is considerably higher than the interest charged when buying a car. This is because people who lease a car do not own it and therefore do not have an asset as collateral, and also because people pay back the cost of a leased car more slowly, say $500 a month compared to $1,000 with a purchase loan. That leaves a greater unpaid balance, or principal amount, at the end of each month that’s subject to interest. Do the math on a lease and you’ll quickly see that most of the monthly payments go towards interest charges with nothing to show for it at the end of the lease term. It’s like renting an apartment versus buying a condominium.

https://www.autoloansolutions.ca/blog/you-could-be-eligible-for-refinancing/ Source: Autoloansolutions.ca

6. Warranties on Cars That Are Purchased are Good These Days

Any problem with a vehicle that is leased and people can bring it back to the dealer and have it fixed right away. This is a top selling point concerning a lease. And, let’s be honest, it is in the dealership’s interest to keep the leased vehicle in tip top shape. However, the warranties on new vehicles that are purchased and financed are just as good as any protection provided on a leased vehicle. Most manufacturers and dealerships now offer comprehensive bumper-to-bumper warranties of four or five years and up to 100,000 miles. That’s pretty good and means that a person who buys a new car won’t be on the hook for any repair costs until long after a leased vehicle has seen its two or four year term expire and been returned to the dealership.

http://blog.autoparkniagara.ca/ Source: Blog.autoparkniagara.ca

5. Leasing Terms Are Deliberately Confusing

The reality when it comes to leasing a vehicle is that most people are attracted by the seemingly lower monthly payments and don’t really understand all the terms and conditions associated with a lease. This is by design. The car dealerships deliberately make the leasing terms confusing so as to hide all of the associated fees and costs, and the items that the person with the lease could end up on the hook for. The end result is that people are often surprised and shocked when they return a leased vehicle and find that they are then on the hook for a number of costs they didn’t know about or anticipate. This can be a trap for people and can be avoided by buying a car. Once a vehicle is purchased, people need only pay it off and keep using it. Nothing confusing about that.

http://www.wheels.ca/news/lease-a-car-or-buy-it-some-pros-and-cons/ Source: Wheels.ca

4. Studies Show the Cost to Lease a Vehicle Usually Ends Up Being the Same as to Buy It

With all the fees, costs and charges attached to a lease, people who choose to lease a vehicle usually end up paying the same amount of money that they would have had they simply bought the car, truck or SUV in the first place. Studies by several North American consumer groups and automotive magazines have all come to the same conclusion—in the long run it is no cheaper to lease a car than it is to purchase it, despite what the salesman at the dealership said. The repair and maintenance costs are also no cheaper, and, as we’ve pointed out, people who lease a vehicle have to worry about the mileage and wear and tear they put on a vehicle. So really, what’s the point?

http://www.leaseit.com.au/why-lease-it/lease-vs-buy/ Source: Leaseit.com.au

3. One Lease Leads to Another Lease

At the end of a lease term, people are almost always forced to lease another vehicle from the car dealership. This is a cycle that can seemingly never end as people go directly from one lease and into another. Sure, you get a newer and different car to drive every two to four years. But the monthly payments never end. And that’s just how the dealerships want it. People who buy a car, pay it off in three years, and then continue driving it for another five to seven years are much further ahead financially than people who never stop paying monthly lease fees over the same period of time. Even with maintenance and repair costs, people who own a car are further ahead than people who find themselves in a never-ending lease cycle.

http://www.quickenloans.com/blog/costs-to-avoid-leasing-car Source: Quickenloans.com

2. You Can’t Negotiate a Lease

Almost everything is negotiable when buying a car. Don’t want to pay for things such as “freight” or “administrative fees”? You can negotiate that. Want to pay a lower amount than the sticker price? Negotiate it. Want the dealer to throw in some extras such as a DVD player, a sunroof and satellite radio? Haggle away. Need a lower interest rate? Fight for it with the car salesman. With a lease, only two things are negotiable—the length of the lease and the annual mileage limit. And people will find that the mileage is almost always non-negotiable. Yes, sir, there are not many deals to be had when leasing a vehicle. People seldom feel that they scored a great deal when driving a leased car off a lot. Most leases are set in stone and ironclad, leaving very little room for any negotiation at all.

http://www.autoblog.com/2010/09/17/credit-union-leasing/ Source: Autoblog.com

1. Most Leases End With a Person Having to Buy the Vehicle Anyway

When a lease term ends, the dealership usually prefers if a person does what? Buys the vehicle they were just leasing. And if they don’t buy the leased vehicle outright, then the dealership requires that they take out another lease. Really, this is the strongest reason for why people should buy a car rather than lease one. After all, if you’re going to end up buying the vehicle in the end anyway, why lease it first for two, three or four years? Wouldn’t it make more sense to just forgo the lease altogether and buy the car, truck or min-van? It sure would. And why be punished and forced to take out another lease if you can’t afford to buy the car you’re driving once the original lease expires? It just doesn’t make sense. Do the math, consider the real reasons why they car dealership wants you to lease a vehicle from them, and then make an informed decision.

http://www.theautonet.com/en/2013/05/30/beware-of-scam-artists-when-selling-your-car Source: Theautonet.com
Jack Sackman

Jack Sackman

Jack Sackman has been writing about movies and TV for Goliath since 2013.

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