It’s The End of The Year Should You Lease or Buy a New Car?
The end of the year is the beginning of new opportunities, with numerous sales events and special deals available across the country. These deals are helpful in allowing new drivers to take advantage of special rates and offers they may not be able to afford normally. The biggest question that naturally arises during this time is whether it is better to lease or buy a new vehicle. Let’s take a look at what each of these options means.
Leasing a vehicle is less common than outright purchase, but it has several potential advantages. In a leasing arrangement, the finance company owns the vehicle and the operator (that’s you) enjoys the benefits of driving the vehicle. A substantial warranty is generally included, which can cover many types of maintenance and repairs, but you are responsible for anything not covered. Additionally, administrative details such as registration and insurance are covered by you as well. It is easiest to think of leasing a vehicle as a long-term rental. The final advantage, however, is the same: you return the vehicle when you are done with it. No strings attached.
Purchasing a vehicle is certainly more common and most people are familiar with the arrangement. You arrange to finance, make a down payment and then continue making a monthly payment for a few years. However, during that time you own the vehicle and are free to use it as you see fit. If all goes according to plan, you will eventually become the complete entitled owner of the vehicle.
Both of these options are viable and each is preferable for a particular type of driver. Determining which option is best suited for your particular situation and taste can be tricky, so here are a few things to consider:
1) Leasing a vehicle results in a lower monthly payment than purchases, which can allow access to vehicles outside of your normal price range. Luxury cars are very popular in leasing and their associated usage is more in keeping with the limited mileage restrictions imposed by many leasing arrangements. If you want a high-end vehicle that you only plan on driving around town, a lease is an attractive option.
2) A potential pitfall for people interested in leasing is the tax burden. State and local sales taxes on a lease-purchase are your responsibility and those can add up quickly depending on the value of the vehicle you are looking at. It can be valuable to time your vehicle purchase according to tax windows, ensuring you are able to deduct your purchase appropriately.
3) A vehicle used for business purposes can often be deducted on your taxes, but only up to a certain value and only for a certain period of time. It is sometimes valuable to purchase after a particular date to ensure a full year’s worth of deductions can be taken advantage of. Consult with a tax professional for more in-depth information.
Keeping these things in mind will assist you when it comes time to purchase a vehicle. Every situation is different and you will have to discern which option best suits your needs. If you are interested in discussing options further and would like to view potential vehicles to purchase, we invite you to visit our showrooms on Hylan Blvd, in Staten Island. We are Island Auto Group and it would be our genuine pleasure to show you what we have to offer.