Let’s face it, the fun part in looking for a car is definitely picking the model, the colour, and picturing yourself flying down the road, your hair waving, in your shiny new ride. Crunching the numbers to determine if it’s better to lease or buy excites no one! And the truth is, there is no black or white answer when it comes to leasing versus buying. Even among our own group, one of us leases, two own outright, and the other two take the bus (or hitch a ride with us!). So when it comes to leasing versus buying, what is best for you?
Leasing is a great option if you:
>> Own your own business
>> Prefer to update your car for a newer model every few years and don’t want the hassle of repairs if anything were to happen (it’s kind of like renting that way)
>> If you want lower monthly payments than buying a car with a loan — between 30 to 60 per cent cheaper
However, the advantages for you in buying are:
>> You will actually own your car or will some day
>> You will one day be free of car payments
>> It may make sense if you want to hold on to a car for a longer period of time
If you are leaning toward buying (which it seems as though you are), there are a few things to keep in mind.
Tip: If you’re going to buy from a dealership, the best time to buy is at the end of the month, as the sales staff often have monthly sales quotas they are trying to meet. Shopping early in the morning — especially in bad weather — when few customers are around, is also the best time to negotiate a great deal.
Tip: Rental companies are also a source for used cars, but they can sometimes have high mileage and wear and tear from being driven by lots of different people. They are often better maintained in comparison to privately sold vehicles.
Tip: You can often get the best price on a vehicle if you buy directly from its previous owner — on average 20 per cent less than the retail price advertised by local dealers. Private sellers don’t have to charge overhead for running a business and are eager to sell.
The Smart Cookies show you their way to financial freedom. Tune in Wednesday night at 9 p.m. EST/PST on the W Network. Be sure to visit smartcookies.com to get new money tips and sign up for our newsletter.