Do you see yourself in this car for as long as you can fathom, or is it just the flavor of the month? You’ll have to ask yourself these questions and more as you decide if you’re going to buy, lease, or subscribe.
Buying a Car
When you buy a car, it’s all yours until you decide to resell it, or it’s damaged or worn down beyond repair. Here are a few pros and cons of making a new car all yours.
On the pro side, buying means that once you’ve paid off your loan (if applicable), you won’t have any more payments to make on the car itself. You can also treat your car the way you like; you can customize it to your specifications, and take it in for maintenance on your own schedule.
It’s also easier to get a loan when you’re looking to buy, even if your credit history isn’t spotless.
However, you’ll have to pay more up front to drive off the lot with your new vehicle. And once you do, the value will rapidly decrease.
Leasing a Car
When you lease a car, you make monthly payments on it, but you don’t own it. Instead, when your current lease ends, the dealer takes the car back, and you can move onto another if you choose.
The pros of leasing are very appealing to those who like new, innovative automobiles and don't want to deal with the hassle of repairs. When you lease, you’re never stuck with a car, and warranties and maintenance are covered by the dealer.
But that can be a con, too. The dealer also decides how much mileage you can put on it, and will charge you fees for going over, as well as any wear and tear you may cause. Add to that the fact that you are pouring money into a car you have limited rights to; you’re not building any equity.
Leasing is also not as accessible to those with bad credit.
Subscribing a Car
Subscribing is a relatively new phenomenon that’s perfect for people who want or need to change vehicles frequently. Consider it like a short-term lease, where you drive a car for one month instead of 18.
The fee you pay monthly includes insurance and roadside assistance, whereas with leasing, the dealer might force you to purchase GAP insurance. The contract isn’t as strict, either, allowing users to cancel their subscription service when they see fit.
On the con side, subscribing is quite expensive, and therefore frequented by wealthier people. The cost of “subscribing” to a BMW for one month might not be worth it if what you really want to do is cruise out of town for one weekend.
Buy, lease, or subscribe? The choice is yours, but it really comes down to what you value more: your money, or the latest and greatest. In the long term, buying is more cost effective, while leasing and subscribing mean you’ll never be caught out in last year’s model.