Pros and Cons of Leasing or Buying New/Used Automobiles
- January 5, 2016
- Category: Cars, Detailing
Our detailing customers often ask about our options about the benefits of leasing an automobile versus buying one new or used. Since all three financing methods have their own benefits, it is all about finding which one works the best for your personal situation. According to HIS, Inc., average car ownership in the US lasts about six years. Edmunds has provided some data that helps to break down the financial costs of all three financing methods.
Edmunds provided transaction data for a midsized sedan. Since lease cycles typically last three years, they compared two lease cycles with one buy cycle so they all even out to six years. The out of pocket cost for leasing a new midsized sedan is around $23,476 total. Buying a midsized sedan would cost roughly $28,104 new or $20,364 used. The downside of leasing is that you do not own the vehicle when the cycle is over. After selling the car after six years, your final cost would be $18,417 for the new car or $15,570 for the new car. While it is technically cheaper to simply by the used car, there are some pros and cons of each.
- PRO: After the lease is up, you simply return the car. You do not have to deal with the hassle of selling it or trading it into a dealer.
- PRO: You will typically have lower monthly payments when you lease a car.
- PRO: When leasing a car, you can drive a brand new car every few years and will rarely have to worry about mechanical problems.
- CON: Leases usually only allow you to drive 12,000 to 15,000 miles annually. You are forced to pay a penalty when you go over your mileage limit.
- CON: You are still responsible for any repairs that are needed on the car.
- CON: You do not truly OWN the vehicle. Think of it like paying rent instead of making payments on a home.
- PRO: When ordering a new car, it is easier to get the options you want instead of having a dealer try and find a used vehicle with your desired specifications.
- PRO: Brand new cars typically come with three year bumper-to-bumper warranties.
- PRO: New automobiles typically have higher resale values due to lower mileage.
- CON: Buying a new car typically have the highest upfront cost and interest rates.
- CON: Selling the car can be a hassle when you’re ready to buy a new one.
- CON: New cars depreciate rapidly. A car is said to lose 40% of its original value within the first year of ownership.
- PRO: Buying used typically gets you the most value for your money as well as costing far less.
- PRO: Used cars typically have less “mental depreciation.” If your car happens to get a scratch or a ding, you won’t have the mental stress of ruined your “brand new car.”
- PRO: Most dealership certified preowned cars offer warranties to protect you from any problems that may come along with owning a used automobile.
- CON: Due to the increased mileage, used cars tend to be more prone to mechanical problems than new ones.
- CON: Used cars usually have a car lower resale value than ones purchased brand new.
- CON: A used car will typically not last as long as a new car if you plan to keep it.
No matter how you acquired your car, GK’s Custom Polishing, Inc. in Avon, OH is in the business of making your motorized items look brand new. We offer detailing, climate-controlled storage and transporting for cars, boats, jet skis, motorcycles, RVs and more. Give us a call at (440) 937-4457 or email us at email@example.com to set up an appointment for your next detail.