Lease vs. buy - which is the best option for you?

Should I lease or should I buy? When you have the facts and ask the right questions, choosing between the two becomes much easier. Some of the answers are derived simply by knowing your lifestyle, budget, and driving needs. Here are a few key questions to ask yourself:

• How long do you typically keep a vehicle?
• How many miles a year do plan on driving?
• Is having ownership in your car more important than lower monthly payments?
• Will I use the vehicle for commercial use which may result in excessive wear and tear?
• Is having factory warranty coverage as long as I am making payments important to me?
• Is having GAP Insurance important to me? (What is GAP Insurance? If your car is totaled or stolen, GAP Insurance pays the difference between what you owe for your car and what the car is actually worth; with long term loans, leases with little or no down payments it’s easy to be “upside down” – to owe more on your car than it is worth.)

The answers to these questions will lead you to the decision that is right for you.

Buy a car instead of leasing when:

• You drive over 18K miles per year
• Monthly payments are not a concern
• You plan to modify or customize your car
• You plan on using you vehicle in a way that will result in excessive wear or damage
• You’re not concerned about the cost of repairs when warranty expires.
• You’re not concerned about GAP Insurance

Lease a car instead of buying when:

• You want a new car every 2 to 3 years
• You don’t want to customize or modify your car
• You want lower monthly payments
• You don’t want to pay for repairs
• You drive fewer than 18,000 miles per year and your driving habits will not change
• You want a low or no down payment
• GAP Insurance is important to you - most leases have it built in.

Deciding whether to lease or buy boils down to which is best for you. Be sure to keep your lifestyle and priorities in mind and visit your credit union for your financing options. As a credit union member, you can also receive great discounts on American made cars whether you lease or buy. Visit http://www.lovemycreditunion.org/ for more information.

Hint: Credit Union Financing + Manufacturer rebates = Your Best Financing Option

Be sure to check out next week’s blog about the myth of 0% financing.

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