In-depth Analysis: Benefits and Drawbacks
Now that you’ve seen the quick view, let’s dive a bit deeper into each of the points that we made above.
Benefits of Leasing.
When you lease a car
, you can trade up frequently—similar to as you would with a cell phone. With kind of setup, you’ll get the latest technology and safety features every few years. Plus, you’ll enjoy lower monthly costs since you’re essentially paying to borrow the car from the dealer. Lastly, warranties and service plans are available at the service center, along with tax savings in several states.
Drawbacks of Leasing. However, for every yin, there’s a yang. When you lease, your mileage is severely restricted. Also, you might have to pay extra if you wear the car down too much. Usually, too, you can’t drive for Uber, Lyft, or other ride-sharing companies. Finally, you can’t sell the car and cash in on any equity.
Benefits of Buying. On the other hand, there are plenty of benefits to buying a car outright. You could theoretically pay it off, continue to drive it, and live auto-debt free. You can drive it until it breaks down, with no mileage limits and no excess wear clauses. Also, even people with subpar credit can purchase a car.
Drawbacks of Buying. Still, there are plenty of drawbacks to buying. First off, it’s usually more expensive. You can also face significant depreciation the second you drive off the lot. Plus, you’re expected to slap a hefty down payment on the table, and you might find yourself engaged in a long-term contract.