Buy vs. Lease
Leasing Advantages
Leasing a vehicle can be advantageous for certain people, depending on their needs, their lifestyle and their personal preferences. For the most part, leasing provides an opportunity for people to drive more expensive vehicles for less money each month and for less money down. Additionally, leasing allows consumers to drive a new vehicle every few years depending on the length of the lease program. Moreover, most leased vehicles are comprehensively covered under a manufacturer's warranty during the length of the lease, allowing consumers to own a more expensive vehicle without the worry of large maintenance and repair bills.
Finally, unlike owning a vehicle outright at the end of a standard automotive loan, leasing helps consumers avoid the hassles often associated with selling their used car to an independent third-party or trading in their vehicle to a local dealer. Instead, you simply turn in your vehicle at the end of the lease term and begin a new lease on a new vehicle; if that's the route you choose to take. It's a simple method some consumers find more attractive than the traditional used car sales or trade-in process.
Leasing disadvantages
To begin, most vehicle leasing programs have a yearly mileage limit. This means that you can only drive your vehicle a certain amount of miles every year without paying a penalty at the end of the lease term. Obviously, these mileage limitations wouldn't work for someone who drives their car long distances on a frequent basis or someone who simply can't embrace being limited to the amount of miles they drive in any given month during any given year.
Another disadvantage to leasing is that at the end of the lease term, you don't own the vehicle. For some people, this is OK. For others, it doesn't make sense to make monthly payments for three, four or five years on a car they'll never own.
Finally, the vehicle leasing process is, in essence, difficult. Lease contracts are often confusing, arduous and lengthy. Additionally, you are bound by the lease terms set forth in the contract even if your driving habits, preferences and needs change. As a result, the difficulty of understanding lease contracts and terms, coupled with the inflexibility of most programs available today, makes leasing an unattractive option for some people.
TRADE VS SELL MYSELF
What is the best practice for dealing with your trade vehicle? The answer to this question is not a simple one because there are a few things to consider. You have several options depending on your priorities. Here are some questions you should ask yourself:
- Do you live in a state that has a state sales tax?
- How much time do you have to sell
- Do you require the proceeds from your trade to by your next vehicle
- What condition is your vehicle? Does it require repairs?
It is common to receive higher value for your trade if you sell it on your own. However, selling the vehicle on your own will require you spend some money to fix the current issues with the car, have the vehicle cleaned or detailed and pay to advertise your vehicle. You'll also need to be willing and available to show the vehicle to all interested parties.
If you decide to trade the vehicle in with the dealer, you may receive less for your trade but the transaction will be far more convenient. You won't have the expenses mentioned above and you can complete the transaction in one setting.
Additionally, In many states, you pay sales tax only on the "Price Difference" as opposed to the full selling price when you buy without trading. For example, if you buy a new car for $25,000 and trade-in your old car for $8,000 you will only pay $1,200 in taxes vs. $1,500 if you did not trade-in your car.
Lastly, If you trade-in your car, you prevent any issues with a dissatisfied customer later on. What happens if the engine burns up or the transmission goes out? If you sell your car, the new owner knows where you live and may contact you. If you trade-in your vehicle, the dealer assumes all of the responsibility and you can walk away carefree.
Leasing Advantages
Leasing a vehicle can be advantageous for certain people, depending on their needs, their lifestyle and their personal preferences. For the most part, leasing provides an opportunity for people to drive more expensive vehicles for less money each month and for less money down. Additionally, leasing allows consumers to drive a new vehicle every few years depending on the length of the lease program. Moreover, most leased vehicles are comprehensively covered under a manufacturer's warranty during the length of the lease, allowing consumers to own a more expensive vehicle without the worry of large maintenance and repair bills.
Finally, unlike owning a vehicle outright at the end of a standard automotive loan, leasing helps consumers avoid the hassles often associated with selling their used car to an independent third-party or trading in their vehicle to a local dealer. Instead, you simply turn in your vehicle at the end of the lease term and begin a new lease on a new vehicle; if that's the route you choose to take. It's a simple method some consumers find more attractive than the traditional used car sales or trade-in process.
Leasing disadvantages
To begin, most vehicle leasing programs have a yearly mileage limit. This means that you can only drive your vehicle a certain amount of miles every year without paying a penalty at the end of the lease term. Obviously, these mileage limitations wouldn't work for someone who drives their car long distances on a frequent basis or someone who simply can't embrace being limited to the amount of miles they drive in any given month during any given year.
Another disadvantage to leasing is that at the end of the lease term, you don't own the vehicle. For some people, this is OK. For others, it doesn't make sense to make monthly payments for three, four or five years on a car they'll never own.
Finally, the vehicle leasing process is, in essence, difficult. Lease contracts are often confusing, arduous and lengthy. Additionally, you are bound by the lease terms set forth in the contract even if your driving habits, preferences and needs change. As a result, the difficulty of understanding lease contracts and terms, coupled with the inflexibility of most programs available today, makes leasing an unattractive option for some people.
TRADE VS SELL MYSELF
What is the best practice for dealing with your trade vehicle? The answer to this question is not a simple one because there are a few things to consider. You have several options depending on your priorities. Here are some questions you should ask yourself:
- Do you live in a state that has a state sales tax?
- How much time do you have to sell
- Do you require the proceeds from your trade to by your next vehicle
- What condition is your vehicle? Does it require repairs?
It is common to receive higher value for your trade if you sell it on your own. However, selling the vehicle on your own will require you spend some money to fix the current issues with the car, have the vehicle cleaned or detailed and pay to advertise your vehicle. You'll also need to be willing and available to show the vehicle to all interested parties.
If you decide to trade the vehicle in with the dealer, you may receive less for your trade but the transaction will be far more convenient. You won't have the expenses mentioned above and you can complete the transaction in one setting.
Additionally, In many states, you pay sales tax only on the "Price Difference" as opposed to the full selling price when you buy without trading. For example, if you buy a new car for $25,000 and trade-in your old car for $8,000 you will only pay $1,200 in taxes vs. $1,500 if you did not trade-in your car.
Lastly, If you trade-in your car, you prevent any issues with a dissatisfied customer later on. What happens if the engine burns up or the transmission goes out? If you sell your car, the new owner knows where you live and may contact you. If you trade-in your vehicle, the dealer assumes all of the responsibility and you can walk away carefree.
