Should you buy or lease a vehicle? The deciding factor?

Almost all vehicle owners at one time or another have considered the option of buying or leasing a new vehicle. There are several factors to consider in determining if you are a good candidate and financially beneficial, but the difficult task for a first time renter is to narrow it down to what is the main criteria when it comes to leasing, especially from current research. shows that more than 25% of all new cars leaving the dealership are leased vehicles.

There are several indisputable reasons why leasing versus buying has its merits. Lower monthly payments, higher-end model selection, minimal maintenance costs, the latest technology and enhanced safety features are all perks that come with a new vehicle. However, despite all the positive features just mentioned, the deciding factor that should ultimately lead to a decision according to a recent article published by Jerry Reynolds, The Car Pro, to lease versus buy, is the number of miles that the potential buyer anticipates. driving the vehicle per year… 17,500. According to him, that is the magic number, and it will certainly be a moot point for discussion in the car leasing industry. Anything less may not be practical depending on your use of the vehicle, and anything greater may end up costing you excessive fees.

If you expect to put down more than that, then you should consider buying the vehicle and forgetting about leasing. If you are a low mileage driver then leasing has its benefits. You must not lease for more than three years or exceed the factory warranty, that is, 24 months or 24,000 miles; because during the term of the lease you are not anticipating any major mechanical or maintenance costs, such as timing chain replacement, tire replacement, air conditioning repairs, transmission repair, or major engine repairs …just regular maintenance, like required fluid changes. , filter replacement, tire rotation, etc. If your lease exceeds the factory warranty, any mechanical repairs will be out of pocket. If you exceed the mileage allotted under the lease, then you will be required to pay the excess mileage charge which can be up to 25 cents per mile, depending on the terms of your lease.

If you decide to lease, ignore the option to buy the car at the end of the lease term, as that is clearly defeating your purpose of leasing a vehicle. Plus, you’ll end up paying considerably more for the car than if you had bought it outright. You may also want to lease from a dealer rather than any third party leasing company due to the availability of lower interest factory options. Another supporting reason is that third-party leasing companies tend to inflate their costs for higher profit margins since they bought the vehicle from the dealer to begin with (as you are) and may also try to tempt you to consider a lease term of more than 3 years or exceed the warranty.

Dealers have made leasing so attractive now in our current economy that if you are a back-to-back leaser, you will be put back in the market for a new car every three years (or sooner, depending on the lease term) , allowing the distributor to increase its purchase of inventory from the manufacturer. Current car statistics indicate that the average car owner who purchased their vehicle has held it for 5 years or more, depending on which source you use, so one can understand the dealer’s drive to lease by volume of inventory. Dealers would like to see you at their facility as often as possible.

If you decide to lease, read the lease agreement carefully, become thoroughly familiar with the terminology, and make sure you fully understand your obligations. We have all heard horror stories at one time or another about the victims of leasing. Personally, I am not a fan of leasing as I enjoy the privilege of owning a car, but for many it may be their best option. If you know what you’re looking for and can bargain wisely, then leasing may be a good option for you.