In the previous post, we have talked about some of the “hidden costs” that you should take note of when renting a car. Today, we will go over some pros and cons of both renting and buying a car.
- Lower monthly payments
- Excitement of driving a new car every two or three years
- Always have the latest safety features and always have a warranty
- You don’t have to worry about trading and selling used cars
The renting pros list may not be very long, however, the list carries a lot of weight. The lower monthly payments can be up to 60% lower than your monthly payments purchasing the same vehicle.
The warranty is also a huge plus. It can be extremely frustrating when your newly purchased vehicle has a major mechanical problem shortly after the warranty runs out, with a lease, you never have to worry about it.
- You must have a stable predictable lifestyle
- Drive a set number of miles
- Consistently maintain your car properly
- Most leases require gap insurance
- Pay more over the long haul to get the lease benefits
Having a constant payment does require a stable predictable lifestyle. Losing your job or a major medical expense can really upset your finances. When you have a lease it is harder to get out of the contract verse selling your purchased vehicle. Leases also have lots of terms you have to meet or you will have to pay fees.
- Have ownership of your car
- Drive as many miles as you like
- Customise your vehicle any way you like
- Build up some trade-in or resale value
- Have the option of driving your car for years to spread out the cost
- You can be better prepared for unexpected lifestyle changes if your car is paid off
- Don’t have to worry about the risk of possible lease-end charges
- You have the option of paying off your loan and being payment-free for a while
The ability to do whatever you want whenever you want without the fear of fees is a great feeling. Drive as much as you want and customise until your heart is content, you own your vehicle. As long as you are committed to driving your vehicle for an extended amount of time, you are unlikely to lose in the cost effective category.
- Higher monthly payments
- You will probably have unexpected cost of repairs after the warranty has expired
- Eventually, you’ll have to trade or sell your used car
- The cons of buying a vehicle are minimal and excepted as a fact of life for most people.
Ultimately, your car should be an investment. When you buy a car you will be the one with the end profit and not some multi-national corporation who wants you to think that renting is a better alternative than owning. That is untrue.
To maximise your investment on a purchase it is prudent to hire a car-buying specialist who has the ability to negotiate a wholesale purchase and of course use a professional selling service to get a premium on the return on your investment when you need to sell it. If you want convenience then that is the prudent way to buy and sell your cars and a far better idea than renting.
Most of the cons of buying a car can be eradicated by the pros of renting, but of course, then you exchange them for the cons of renting. Leases are cheaper in the short term however in the long term a purchase is most definitely cheaper. Weighing the pros & cons will assist you to come to the decision that is right for you and your family.