The holidays are a great time to buy a car. Since the year is coming to a close, automakers are offering some enticing car deals to move cars off their lots and hit their sales goals for the month and year. As you wade through the financing, cash back and lease deals available, you might still be on the fence as to whether you should lease or finance your next new car.
If having a low monthly payment is important to you and your budget, consider leasing. When you lease, you only make payments on a portion of the car’s price, not the full amount. The down payment on a lease can also be low, ranging from $0 to several thousand dollars. However, the more you put down the lower your monthly payments will be. Keep in mind that leases have mileage restrictions and you’ll have to pay a fee if you go over the mileage limit, so if you do a lot of driving, you shouldn’t lease. Leasing also generally requires a good credit score, so if your credit history is less than perfect, you may want to finance or consider a used car.
You also won’t own the car when the lease is over like you would when you finance. When your loan is paid off, you own the car free and clear. If you like to keep your car as long as possible and enjoy not having a car loan payment after it’s paid off, then buying is better for you. Over several years of not having a car loan payment, you could save money compared to someone who has to keep leasing a new car every three years.
When it comes to buying and leasing, there’s no one-size-fits-all answer. Consider your budget, driving needs and lifestyle before you decide whether to buy or lease. There are auto lenders who can provide you with financing that works best for you, no matter whether you decide to buy or lease your next vehicle.
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