Leasing vs buying a car: 4 things you should know

For something almost everyone uses, cars can be costly. To make them more accessible to a wider range of consumers, most dealerships provide an array of financing options. Other drivers, however, prefer buying cars upfront to avoid monthly payments. Below are a few nuggets of information that may help you decide between buying or leasing your next car so you and your family make the decision that suits you best. 

1. Boosting your credit score is always a good idea

When making pretty much any financial commitment, having a reasonable credit score will serve as an advantage. If leasing a car is the best route for you, check your credit score before beginning the process. A bad credit score is a major red flag for a dealership relying on you for monthly payments. It tells the story of a person who has been financially irresponsible in the past (whether or not that describes you in the present). Though there are tricks to getting around bad credit, having a solid score will simplify auto loan procedures. To avoid letting the financial errors of your past define you, we recommend raising your credit score before car shopping. You can accomplish this by keeping all of your I’s dotted and paying everything you owe on time. Higher credit is a benefit in many pivotal purchases, so raising your score will help you out beyond the car-buying process.  

2. Budget will play a significant role  

The size of your budget will probably determine whether you lease or buy. Proactively creating a budget will help you later on when the time comes to choose between cars. Remember that when leasing a car, people are generally expected to give 20% of the car’s cost upfront as a down payment. Make sure you have this money available when looking into vehicles so you aren’t surprised to learn what you owe. Likewise, if you decide you’d rather buy than lease, be positive, you can afford the car you want. Savvy financial advisors will tell you that this doesn’t simply involve having a lump sum on hand but being able to give up this cash without sacrificing other bills or necessities. If an overwhelming portion of your income goes toward car payments, you probably can’t truly afford the car you’re spending so much on. Budget before committing to a vehicle, or be forced to scrimp and save when all spare change goes toward paying off the car. 

3. Buying a car gives you more freedom to sell 

When you purchase a car outright, how long you keep it is entirely at your discretion. When you get sick of the vehicle or fall in love with a new one, you can sell it immediately. Not owning a car boxes you into a contract, and you can’t move on to a new one as swiftly. When you terminate a lease early, you open yourself up to costly fees. Every lease agreement is different, so review the details before signing your name on the dotted line. If you’re inclined to change your mind at a whim, buying may suit your personality more than selling. 

4. Consider your personal stress factors

When you elect to purchase a car rather than lease it, this decision erases the stress of monthly payments. Owing money can weigh on you, but buying a vehicle means you don’t have that extra stressor to worry about. Once you snag a car in cash, it’s yours to keep and do with as you please. You don’t have to think about the late fees incurred or the hits to your credit score that can happen when you miss payments. If money has historically been a source of stress for you, saving up to buy a car might grant you more peace of mind.

Shop Transwest 

Whether buying or leasing is the best bet for you, Transwest surely has a car that will provide everything you could possibly want. Our lots are full of variety, housing cars of all shapes, sizes, brands, and colors. Explore our inventory online or at one of our brick-and-mortar stores.