Is it better to buy or lease a car right now?

As your friendly neighborhood wealth management advisor, my answer is… it depends! Each individual’s financial situation is unique, and what works best for one person might not be the ideal choice for another. Let’s explore both options to help you make an informed decision.

Current Market Conditions:
Interest rates are currently high, which impacts both financing and leasing costs. Regardless of the route you choose, you’ll need to consider how these rates affect your overall expenses.

Financing a Car:

Pros:

• Ownership: Once you pay off your loan, the car is yours. You can drive it for as long as it runs without any further monthly payments.
• Customization: You can modify the car as you please, adding any features or making any changes that suit your needs.
• Mileage: No restrictions on how much you can drive.

Cons:

• Higher Monthly Payments: Financing typically comes with higher monthly payments than leasing.
• Depreciation: Cars lose value over time, impacting your resale value.
• Maintenance Costs: As the car ages, maintenance costs can increase, which you’ll need to budget for.

Leasing a Car:

Pros:

• Lower Monthly Payments: Lease payments are generally lower than loan payments for the same car.
• Newer Models: Leasing allows you to drive a new car every few years, which means you’ll always have the latest features and technology.
• Lower Maintenance Costs: Newer cars under lease are often covered by warranty, reducing out-of-pocket maintenance expenses.

Cons:

• No Ownership: You don’t own the car at the end of the lease term. You’ll need to lease another vehicle or buy one.
• Mileage Limits: Leases come with mileage limits, and exceeding these can result in hefty fees.
• Money Factor: Leasing involves a “money factor,” a form of interest. High interest rates can increase the cost of leasing.

Making the Decision:

To help you decide, my firm, Wolfpack Wealth Management, provides a handy resource flowchart called “Should I Lease or Buy My Next Automobile.” This tool can guide you through various scenarios based on your financial situation and preferences. Check it out at Wolfpack Wealth Management Free Resources.

Remember, the best decision depends on your personal circumstances, financial goals, and lifestyle. If you need further assistance, feel free to reach out. As always, I’m here to help you navigate your financial journey!

Your Friendly Neighborhood Wealth Management Advisor,

Leyder “Aiden” Murillo