You’ve been eyeing that shiny new BMW for a while now and you’ve decided it’s time to make it yours. So, should you buy or lease? The decision to buy or lease a car can be a daunting one. One local BMW service Las Vegas shop sees a lot of BMW’s from both categories. More and more automakers are doing anything and everything they can to clear their lots of stock. Car buyers have to consider offers of 0% financing and generous cash back incentives as well as leases that offer low monthly payments and payment protection plans.
The choice to lease or buy isn’t anything close to what it was a couple of years ago when low residual vehicle values and poor credit climates made lease payments so high that consumers started walking away from leases. Now manufacturers are looking to cut down on their massive inventories by offering low payment leases. Deals in the world of purchasing are on the rise too. Major cash back deals are being issued to try to lure buyers into taking overstocked cars off the lots.
Here are some rules to follow when considering buying or leasing:
Buy a car if…
You don’t owe more on a trade-in than it’s worth.
If you haven’t paid off your old car you need to check your loan balance and our cars value. If the odds aren’t looking good then you may not be able to secure financing for a new vehicle. In the past banks would finance a new car purchase and any outstanding balance on an old auto loan, but now they’re only lending enough to cover the purchase of a new car.
You’re a long distance driver.
Most auto leases have mileage limits and restrictions. If you drive a lot and at long distances you’ll pay overage penalties.
You drive your cars until they’re dead.
You should buy a car if you think you’ll drive it for at least six years or until after it’s paid off. If you buy a car, it’s yours. When you lease a car it’s not yours when the lease is up.
Lease a car if…
You have stellar credit.
There are stricter credit requirements for leases. Banks have fiver credit tiers to determine financing offers and only consumers that fall in the top 3 become eligible for leases.
You like to change it up.
If you like to switch up what you drive every two or three years than leasing could be for you.
You worry about the drops in used car values.
If you don’t think that cars will maintain their value, especially when competing with bank and loan deals and incentives then skip the hassle and lease.