Deciding Whether to Buy or Lease a Vehicle
If you’re planning on shopping for a new vehicle, or will be in the next year or two you may be considering whether you should lease or purchase that new Subaru you’ve had your eye on outright. I would love to tell you that you should buy a vehicle or that you should lease a vehicle, but one option isn’t right for everyone. You must consider the benefits and drawbacks of each situation, and how your car ownership habits affect the whole situation. Only when you do this can you truly determine if you should be buying a car, or signing a short-term lease agreement instead.
How Often Do You Want a New Vehicle?
One of the biggest considerations that you have to make, and you need to be honest here, is how often do you want a new vehicle? Are you willing to deal with an aging vehicle past the first five years that begins to have mechanical problems that need to be addressed? If you are the type of person who will commit to a vehicle and drive it as long as possible then owning is much more affordable than leasing. Especially with quality vehicles like the Subaru Impreza WRX. If you don’t like dealing with repairs and will want to switch to a new vehicle every three or four years then leasing is probably a better deal and will actually save you money.
Saving Through Lower Payments
The way that leasing can save some buyers money is through the lower payments. A lease payment is lower than a car payment because the lease only cover depreciated value. If you lease a vehicle that starts at $25,000 and will be worth $15,000 after the three year period is over you only pay the $10,000 in depreciation. If you were to buy that same vehicle your payments would be going to cover the full $25,000 which is why you would be paying so much more each month.
If you are getting a vehicle for business purposes it actually makes more sense to buy than it does to lease most of the time. This is because of all the additional deductions that you can take. Not only can you deduct the vehicle payment that you are responsible for each month, but also the depreciation of the vehicle, the mileage and the operating expenses for the vehicle. All of these deductions really add up and you might find your yearly costs of buying versus leasing to be more affordable for that reason.
Consider Your Yearly Distance
Most lease agreements cover between 12,000 and 15,000 miles a year. If you go over that by a significant amount leasing probably isn’t going to be affordable for you. Lease agreements that offer higher mileage amounts cost more money to obtain and if you go over the amount you’ll be hit with a stiff penalty. That being said, if you don’t drive very far you may actually save even more with a lease and could work out an agreement with a lower mileage amount.
When you take the time to consider the benefits of leasing and buying a vehicle it makes it a bit easier to come to the right conclusion. For some people it simply makes a lot more sense to lease than to buy, but for others buying is clearly the more affordable option.