Buying a Car Over Leasing: Why is it Significant?
If you’re planning to have a new automobile, there are several options you can take. Not everyone are able to buy a brand new car, but it’s a good thing that individuals can purchase or lease a used car. In this post we will go over that details and show you some of the advantages to buying a used car over leasing one.
To avoid the mileage limitations that you have when leasing a used vehicle, you should contemplate purchasing it instead. Most lease agreements come with a particular yearly mileage limit. The mileage on these agreements commonly starts at 10, 000 miles and they may reach up to 15, 000 miles each year. The price of leasing will also increase if you opt for a higher mileage. Furthermore, you are required to pay a fee per mile when you go over the mileage that was agreed in the agreement. When purchasing a car however, there is no mileage limitation or any over-the-limit fees to fret about, and you don’t have to pay any monthly payments.
Another advantage is that the payments will directly go to your equity, which you can utilize in the future for loans, granted the contract is over. On a lease agreement, your payments won’t be going towards equity because at the end of the lease you will need to return the vehicle to the dealership or the lessor. Like when you purchase a house you won’t keep a home even if you have been renting it for 20 years.
Another drawback regarding renting a car is the presence of contract cancellation charges. Besides the cancellation fee, the dealership will also charge you with all sorts of penalty fees if you choose to cancel the contract before its term has ended. If you purchased the car, then you could resell it if you want to do so. The money that you have from the resell could be used to pay the rest of the loan or you can utilize to pay for your other personal expenses.
It is absolutely clear that buying a car is a more sensible thing to do than renting if you consider the points mentioned above. Before making a decision however, you should gather the information and consider your current situations as there are times when it is much better to rent.