Ever thought about whether it’s better to rent or buy a car for yourself or your family? Cars are awesome—they take us to school, sports practice, and even on vacations. But here’s the tricky part: when getting a car, you usually have two choices. You can buy it and keep it for good, or lease it, which means using it for a set time and giving it back later.
They both sound pretty cool, right? But which one works better for you? Don’t worry—it’s all going to make sense soon. By the end, you’ll know if it’s smarter for your family (and maybe you someday) to lease or buy a car. Buckle up—we’re about to hit the road on this decision-making journey!
Rent or Buy a Car: What Does It Mean to Lease?
Put yourself in a big toy shop and look around. You see the coolest bike you’ve ever seen. You agree to rent it from the store for a year because you don’t want to buy it. You agree to keep it very clean, not ride it too much (no crazy tricks!), and give it back at the end of the year.
That’s a bit like renting a car! When people hire a car, they take it from the company that makes the car for a few years. During the loan, they can drive the car but don’t own it. Rental options are available for both short and long periods, so you can choose what fits your needs.
When you lease a car, you pay a small amount each month for as long as you have the car (usually two to four years). This is instead of getting the whole car.
It’s against the rules to drive the car too many miles. You can only drive a certain number of miles each year with most leases. Go past the limit? You need to pay more.
- Return or Buy: You return the car when the lease is up. But sometimes you might be able to buy it for a set price. When your lease ends, you must return the vehicle unless you decide to purchase it, and you may need to consider your next steps, like starting a new lease or buying another car.
It’s easy to lease things if you always want something new. It’s like getting new toys every once in a while! Leasing also avoids the hassle of selling or trading in your car when you’re ready for something different.
What Does It Mean to Buy a Car?
Now picture yourself in the same toy store, but this time you save your allowance and buy the bike for yourself! You own the bike completely. You can always keep it or sell it when you need cash for something else. You can scratch it, fix it up, and ride it as much as you want.
That’s how it is to buy a car. Your family owns the car they buy. Buying a car means you are making a purchase that gives you full control and ownership of your own vehicle. They can get a car loan from the bank to pay for it, but they will own the car as soon as the loan is paid off. When buying a car, you usually make a down payment upfront, which reduces the amount you need to borrow. The loan term is the length of time you have to repay the loan, and the interest is the extra money you pay the bank for lending you the money. Both the loan term and interest rate affect your monthly payments and the total cost of the car.
Important Things to Know Before You Buy a Car:
- Ownership: Your family gets to keep the car after you pay off the loan. Don’t send it back! As you make payments, you build equity in your own vehicle, increasing your ownership stake over time.
- There are no mileage limits: You can drive as far as you want. How about a cross-country trip? Not a problem! When you’re ready for your next vehicle, you can trade in your current vehicle to help pay for the new one.
- Make It Your Own: You can change or decorate the car in any way you like. Whatever you want—paint it purple or add some fun seat covers! You also have the option to pay cash for your car purchase, which means you own it outright from the start and avoid paying interest.
People who like to make promises and want a car that will feel like part of the family for years to come should buy.
Why leasing a car is a good idea?
Some people really enjoy leasing. One of the key benefits of driving a leased vehicle is the ability to drive a new model car more often, which can be more affordable and flexible than buying. The best things about renting a car are these:
1. Always drive brand-new cars
You get to drive a brand-new car when you hire it. Imagine getting a new PlayStation or Xbox every couple of years. For sure, you always have the newest features, the best looks, and the coolest new gadgets.
One year, the car might have lane-keeping assist, which helps you stay in your lane. The next year, the car might have self-parking or even better safety features. Sounds exciting, right?
2. Less expensive each month
Leasing generally costs less each month than buying because you’re only borrowing money. It’s like renting a house for less money than buying a big house.
Leasing a car is a great way for your family to save money every month and still get a new car.
3. No Big Repair Costs
There is generally a guarantee on leased cars. Many times, the seller will pay to fix or fix up your car if it breaks down or has a big problem. This is called a guarantee. Small things, like getting oil changes, are all your family has to do. Regular maintenance is still required for leased vehicles, but major repairs are often covered by the warranty.
4. There is no long-term commitment
When you lease a car, you only have to keep it for a few years. It’s okay if you don’t love it; you can send it back and choose another one. In the same way, you should try on different styles before deciding on your best.
Leasing makes more sense for people who want flexibility and don’t want to commit to one car for many years.
Bad Things About Leasing a Car
There are also some bad things about leasing out there. This is what could go wrong.
1. “You’ll never own it”
When you rent a house, it’s not really yours, right? It’s like that with leasing. When you lease, the car is considered a rental vehicle, and you must return it at the end of the lease. The seller still owns the car even though you pay them all that money every month. You have nothing to keep when your lease is up.
2. Limitations on Mileage
When you lease a car, you can’t go as far as you want. Most cars have a cap on how many miles you can drive in a year, like 10,000 or 12,000. If you go over that, you might have to pay extra for every mile!
You could be told that you can only play with your toys for an hour a day. If you want to use them longer, you would have to pay extra. Not fair, am I right?
3. Additional Fees
You might be charged if the car has too many dings, scratches, or other damage when you return it. So much damage is known as “excessive wear and tear.” It could cost a lot to fix even something as small as juice getting on the seats. You may also be charged for repairs if the car has damage beyond normal wear and tear. Oh no!
4. Do not make any major changes.
You can’t “own” a leased car. Would you like to paint it bright green? Not at all. Should you add some soft dice to the mirror? Most likely not. It has to be returned exactly how you got it.
What are the Pros of Getting a Car?
Okay, let’s talk about getting something. The benefits of owning your own vehicle include access to personal transportation, flexibility, and the ability to take advantage of exclusive incentives. Purchasing a vehicle means you have your own car to use whenever you want. It’s a good idea to buy a car for these reasons. Owning a vehicle gives you access to all the benefits of ownership, such as flexibility, control, and the freedom to use your vehicle as you see fit.
1. You Own It!
You don’t have to return the car that you bought. It’s yours, just like your pet or favorite toy. It is yours to keep or sell whenever you want.
2. You can drive as much as you want.
You can drive as much as you want after you buy a car. You can drive as many miles as you’d like without worrying about extra fees. This is a big deal if your family likes to take road trips or has long drives. Every year you drive 20,000 miles? Do it!
3. Make it really yours
When you own a car, you can make it look however you want. You might grow out of fluffy seat covers, but a custom paint job or a roof rack? Okay, no problem!
4. Save money over time
You will own the car when the loan is paid off. No more payments every month! It’s like paying off your braces—once it’s paid, it’s done, and you’ll keep getting perks for life.
Buying a car can be a better deal over time because, after the loan is paid off, you stop making payments and still keep the car, which adds long-term value.
What are the Cons of Getting a Car?
Also, buying isn’t perfect. Owning a car often comes with a higher monthly expense and monthly cost compared to leasing. If you want to own a car, read this first.
1. It costs more up front
It can cost a lot to buy something, especially at first. It’s possible for monthly loan payments to be higher than rent. It’s like deciding between saving up for a pricey drone and borrowing one for a few years.
2. Fixing things can cost a lot
Your family will have to pay for big fixes after the guarantee runs out. Need new brakes? A brand-new engine? That hurts. Those fees can add up.
3. It gets less valuable
Over time, cars lose value. Depreciation is the word for this. If you buy a brand-new computer game and then try to sell it a year later, it won’t fetch nearly as much. It’s the same for cars, but they’re much bigger.
4. Making a long-term commitment
It’s a big choice to buy a car. It can be a pain to sell the car if you change your mind or want something else. It’s not as easy as just giving it back like with a lease.
Which One Should You Pick?
Here’s a quick way to decide now that you know the pros and cons:
For some people, renting a car or choosing a long term car rental is a better option, especially if they only need a vehicle for a short period or for long distances. Leasing or renting can also be cheaper or more affordable than buying, especially for those who can’t afford a new vehicle. If you’re interested in electric vehicles, leasing or purchasing can provide access to incentives and the latest technology. Car insurance and insurance coverage are important considerations whether you buy, lease, or rent a car. When comparing leasing and buying the same vehicle, keep in mind that monthly payments and total costs can differ significantly. If you plan to use the car for ride-sharing or as a rental car, there are special rental vehicle and car rental options available, including through Uber’s Vehicle Marketplace. Long term rental and long term car rental can be a flexible alternative to ownership. Consider all your options—including purchasing, leasing, and renting—to find the better option for your next ride.
Leasing is the way to go if you like getting new cars often, want lower monthly payments, or don’t plan to keep the car forever.
Buy if you want to own the car, don’t care about gas limits, and plan to drive it for a long time.
It really depends on what your family wants and what fits their budget the best. No matter which choice you make, remember that the car you get will take you to some cool places!
It’s time to go—vroom, vroom!
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