Inflation: buy or lease
Inflation: buy or lease. When someone needs a car, one of the questions that arise during decision-making is: what is better to buy or lease?
The most common way to buy a vehicle is to request a loan, pay the downpayment and then over seven or eight years, pay back the requested money, plus interest.
On the other hand, if leasing -rental- is used, a downpayment is usually paid, which is generally less than what is necessary to buy the car for two, three, or four years, depending on the duration of the rental contract, You pay a monthly fee to use the vehicle. This monthly premium is less than that generated by a purchase loan. After that time indicated in the contract, you can make the decision to buy the vehicle or leave it and enter into another Leasing of a new model.
All decisions have their pros and cons. In the case of leasing, the positive thing is that you pay less money to have a new car and every two or three years you can change it for a more modern model, continuing to pay for its use. The worst thing is that the car is never owned and the leasings have an annual mileage limitation. If it is exceeded, a penalty is paid between 10 and 50 cents the extra mile.
The bad side of buying a car is that the downpayment is higher, the same happens with the monthly loan premium. The best thing is that if you get tired of the car you can sell it and with the money from the sale pay what is left of the loan. Also, after seven years, when you finish paying it, you can continue enjoying it without having to incur monthly expenses. Plus, there’s no limit to the number of miles you can ride per year. It’s your car.
In an inflationary situation like the current one, interest rates must be taken into account. The higher the interest rate, the higher the vehicle payment will be. In the third quarter of 2022, the new car interest rate exceeded 5.7%. The median price of buying a new car through a loan exceeded $40,000.
In short, buying or leasing is a very personal decision. It is advisable to pay attention to the different factors and see which exit is more convenient. What is indisputable is that at Univista Insurance you can find the cheapest car insurance in Florida. Inflation: buy or lease