Should I buy or lease my new car? A very popular question on the minds of consumers, especially young adults.
Bottomline:
Buying a car is throwing money away down the toilet whether you lease or buy. Cars decline in value so it really comes down to choice in terms how you want to pay for the car.
Short Term:
Leasing is cheaper than buying a car over the short term only.
Long Term:
It always costs more to lease over the long term than it does to purchase a car.
Leasing is:
- Paying just for the USE of the car.
- Having nothing to show for all the years you paid the lease because you give the car back at the end of the lease term.
- Driving a new car every three to five years, have a lower monthly payment, and having no equity at the end of it.
Buying is:
- Paying for the entire total cost of the car.
- Owning the depreciated equity and remainder of the value of the car once you paid it off.
- Having higher monthly payments, peace of mind of owning something, like to drive your car until it dies, and choose to absorb the depreciation.
Verdict on new cars:
It’s your choice.
Best Scenarios:
We find buying a three year old car is the most cost effective solution as you allow someone else to absorb the depreciation. In terms of leasing, a lease take over wherein someone put in a down payment and due to their circumstances no longer require the vehicle makes economic sense.
Contact Alphil Guilaran today to learn more about how we can serve and develop solutions for you, your family or organization.
Alphil Guilaran
Executive Director
604.687.7773
