Buying or leasing a car is a big decision for students, considering the subsequent benefits such as flexibility and convenience. But, when tackling student loans and other financial obligations, it is vital to weigh all your options and look into either leasing or buying a car.
I also know that international students, as well as exchange students who are here for a short time, may need a car, but are unaware of the available options. I am here to inform you that you can have a car. The question is whether — given your budget, preferences, and lifestyle —should buy or lease. Earlier this year, I considered having a car, and so I went about researching and talking to dealers within which time I gained considerable knowledge, which I am going to share with you.
First, let me start with leasing. Leasing a car involves making down payments and subsequent monthly payments according to the terms of the lease agreements. As a student, your savings might come in handy because you don’t necessarily have to take a loan. Lease terms vary from one dealer to the next, though your income and factors such as the creditworthiness and down payments are an issue of concern. Having said that let’s look at some of the benefits of leasing;
First, Lower and smaller monthly payments; second, There may be fewer repairs, especially if you leased a new car, the lesser might also provide the warranty. Third, You can choose to end or extend your lease once it expires.
On the other hand, you cannot own a leased car and also cannot modify it because it is not yours. Two, most leases have restrictions as to their usage. For example, you may be limited within 10,000 to 12,000 miles or less in a year. Driving beyond the limit will result in additional charges for each additional mile, there may also be terminal costs related to wear and tear these extra charges can add up quickly making the lease far more expensive than anticipated. Third, in the long run, rentals are costly because you make monthly payments as well as depreciation in the loss of value.
Now that we’ve seen the advantages and disadvantages of leasing lets us look at the other option buying.
Buying a car is more complicated than leasing. If you don’t have cash upfront, then you need to get an auto loan to finance the purchase. You can get a loan from the dealer or the bank. However, this may be difficult for students, especially international students. With the loan, you make monthly payments to the lender plus interest. The lender holds the title of the vehicle until you finish paying.
There are several perks that come with buying a car instead of leasing. To begin with, you own the car; therefore, you can do anything with it, make modifications, exceed the miles, sale it, and name it anything. Secondly, over the long term, buying is way cheaper than leasing, the monthly charges for a lease are a more affordable but the only expenses for a buy are maintenance and repairs plus the insurance coverage. Lastly, there are no additional costs for mileage and wear and tear. On the downside, buying a car is very expensive, and this can be a roadblock, especially for us students. Second, there are higher monthly payments and repair costs in terms of interest charges, maintenance, and repairs, especially after the manufacturer’s warranty runs out. Lastly, the value of the car depreciates with time, and you may end up with negative equity if the car loses value faster than the loan payment.
From all that we’ve talked about, which is the right option for you?
In conclusion, the lease or buy decision boils down to personal preferences, affordability, flexibility, and long term costs. If you don’t have enough finances, want low monthly payments, and hope to avoid long term costs related to repairs and maintenance, then a lease is the best option for you. On the flip side, if you can afford it and you want a wide choice of cars, then the best option is to buy your car. In the long run, buying is cheaper than leasing. However, as students, why don’t you lease as you save for the dream car?