Cars are necessities, especially for people who go from one place to another on a daily basis and public transportation is a hassle. But if you are to own a car, will you buy one or lease it instead. Here is a guide for first-time car owners – and even those who already own one – to help them decide if leasing or buying will be most beneficial for them.

Leasing

Leasing a car frees you from a lot of obligations that come with buying a vehicle. Leasing is choosing your preferred car and signing a contract that is good for several years where you have to pay a certain amount each month until the contract expires. You then have to return the car to the dealership.

  • You don’t have to pay a very high monthly payment for a leased car. It is because you are only paying for the car’s depreciation over the years that it will be in your possession, and not the whole cost of the vehicle.
  • If used for business, the leased car can contribute to the reduction in taxes relating to the vehicle’s financing cost and depreciation.
  • Planning to drive a different car after several years without the hassle of disposing of the previous unit? Then leasing is for you. After the term, all you have to do is return it to the dealership, and you can opt for another car model for a new lease contract. Keep in mind though that if you opt out of the agreement, you need to pay several months’ worth of monthly payments for the opt-out.
  • You can choose from different leasing options. You can look for the cheapest lease deals online before you go for the company that you deem can give you the best deal.

Buying

Buying a car, on the other hand, comes with its advantages. You are obliged to pay for the car’s financing over the course of a few years. By the end of the term, the car is all yours. You can then do whatever you want with it: sell it, modify it or give it to someone else.

  • If you are too hard on your car and scratches and dents often appear on your car, then buying one is your best option. You don’t have to pay wear and tear fees that leasing requires.
  • Putting excessive mileage on your vehicle is not an issue unless you are planning to put it up for sale later on. If you lease, you need to pay for every additional mile you incur outside of the agreed upon mileage limit.
  • You have to pay for the car’s total amount instead of only the depreciation cost, and it can put a dent in your monthly budget.
  • You get to keep your vehicle for as long as you want to.

There are other factors, both positive and negative, to buying and leasing that can help you decide the best option of owning a car. Research thoroughly before you decide to lease or buy a car.