For years, those looking for a new car have debated whether they should buy or lease one. The answer to this question varies depending on several factors and may change over time. Both choices have advantages and disadvantages.
If you want to buy a new car in 20244, here’s what you should know.
Leasing a new car in 2024
When you lease a car, you do not own it. You make a monthly payment for a set period of time—usually three years—and then have the option of purchasing the vehicle or returning it to the dealership.
Here are the pros and cons of leasing a new car in 2024:.
Leasing Pros
Leasing a vehicle allows you to drive a brand-new car for a much lower monthly payment than if you had purchased it. You can also get a new car every three years, complete with the latest features and a warranty.
Dealers want you to lease, and leases have been declining in recent years, so you may be able to find good lease deals in 2024.
Cons of Leasing
You do not own the vehicle, so you have no equity in it. As a result, when you return a leased vehicle, there is no down payment required for the next vehicle.
It’s also important to understand that leases allow you to drive a certain number of miles during the lease period. The allotted annual mileage can be as low as 12,000 miles. If you drive more than the allotted distance, you must pay for each additional mile when you return the car. If you drive a lot, this can quickly add up.
Purchasing a New Car in 2024.
When buying a new car, you have the option of paying cash or financing it. When comparing buying and leasing, make sure to include all applicable costs, especially if you’re financing.
Here are the pros and cons of purchasing a new car in 2024.
Buying Pros
When you own a car, you have the freedom to drive whenever you want. You do not have the mileage restriction that comes with a lease. If you drive more than 12,000 or 15,000 miles per year, buying might be your best option.
When you buy, you can get only the options and features you want — not the ones you don’t. Lease vehicles, particularly high-end models, may include extra features that you don’t need but are already included in the price.
Buying Cons
New cars are expensive, and interest rates are currently high. While it is possible to refinance a car loan if interest rates fall, the chances of rates falling significantly during the term of your loan are slim.
Furthermore, new cars lose value quickly. If you know you’ll want a new car in a few years, you’ll most likely lose money when you sell or trade it in.
Making an informed decision about whether to buy or lease is critical, and you should do so before visiting the dealership. Dealers can be very persuasive, and they usually try to encourage customers to lease. Why? Because they know you’ll be returning to the same dealership in three years and likely leasing again. So, before you go to the dealer, make a decision and stick to it.