Is it better to lease or buy a car in 2021? More options are available for purchasing a car today than ever before. Online shopping and curbside delivery changed the way car buying is handled but choosing to lease or buy a car is still an important decision. Should I lease or buy a car in 2021?
Understanding the pros and cons of leasing a car is vital to making the best decision for your lifestyle and budget. What are car lease benefits in comparison to financing an auto loan? What is lease-to-own and should you do it? Read on for important information about the pros and cons of leasing or buying a car today.
Whether financed through an auto loan or purchased in full with cash (or check), buying a car has multiple benefits. Pros to buying your car instead of leasing one are viewable as three separate categories. Personalization, financial and flexibility-based categories of benefits & pros are all valid aspects of car ownership to consider prior to making any decisions. Are there any cons to buying a car as well? Should I lease a car instead? Questions such as these are valid and smart to ask. It is advisable to first consider all pros of buying vs. leasing a car, and then look at the cons of each option in a side-by-side comparison.
Three distinct categories of pros to buying a car are:
- Personalization Benefits.
- Financial Savings.
- Trade-in/Reselling Flexibility.
Personalization of a car is important to many U.S. drivers. Even if your car is financed through an auto loan (as many are) you still have permission to repaint, upgrade wheel types, add a customized spoiler and more. Car lease benefits, while also plentiful, simply do not include this type of freedom.
Perhaps the most important pro to buying a car is the financial savings possible compared to the costs of a lease. Nearly every auto loan includes an annual percentage rate (APR) finance charge of some kind. Your credit (FICO) score, income and other various factors impact the APR amount assessed to your auto loan. Still, when you pay off your car loan, you own your car. It is also possible to find low-APR loans if you put some time into researching and comparison-shopping loan rates. For example, most credit unions offer significantly low APRs on loans to members.
Buying a car, even when financed through an auto loan, imposes no restrictions on how far you are allowed to drive it, at what times and for how long. Some amount of normal wear and tear is almost guaranteed to happen as well. When you buy your car you do not have to worry about overpriced extra surcharges for depreciation caused by wear and tear.
What are some other ways buying a car is financially beneficial? Purchasing a car in full with cash might get you significantly discounted prices off the lot. Some auto loan promotional deals also offer zero-percent financing if you pay the loan off in full within a specific amount of time. Resale values on used vehicles are almost never close to the initial purchase price, but a car you take great care of might still yield a higher resale or trade-in price than expected. Finally, buying a car is akin to mortgaging your home as opposed to renting it. Both auto loan and lease payments cost money. At the end of an auto loan term, however, you own your car when the payments stop.
Owning your car gives you total flexibility pursuant to trade-in and reselling options. You are not even required to fully pay off your auto loan prior to selling your car if you choose. While the trade-in value of your vehicle is not completely within your power to dictate, the choice to accept a trade-in or purchase offer from a private buyer is. Because you own your vehicle its value is considered an asset. Certain tax benefits might even be available, with specific conditions applying.