Hidden Benefits of Owning vs. Leasing a Car

When it comes time to acquire a vehicle, you can either choose to lease it or to own it. While leasing may be the less expensive option in some cases, opting to buy a car outright also provides you with several benefits. Let’s take a look at a few benefits that may not come to mind right away.

The Vehicle Can Be Used to Secure a Loan

An auto title loan allows you to borrow between 50 and 80 percent of the equity in your car depending on the lender that you choose to work with. If you had $10,000 of equity in a car, you could borrow between $5,000 and $8,000. The application process only takes a few minutes to complete, and the money can be sent directly to your bank account within hours of loan approval.

Cars Can Be Depreciated for Tax Purposes

If you use your car for business purposes, you may be able to depreciate your vehicle each year for tax purposes. This may reduce your business income by thousands of dollars per year throughout its designated useful life. By reducing your business income, you may reduce your tax burden to nothing or even claim a loss for the year. However, it is important that you keep good records as it relates to the business use of your car if you do choose to use it to lower your taxable income.

You May Pay Less for the Car Overall

When you lease a car, you pay for the vehicle’s depreciation over the term of the lease. If you choose to buy the vehicle once the lease expires, you will pay an amount determined by the manufacturer, which may be more or less than its true market value.

You will also have to pay interest on any loan that you take out and account for future depreciation. Assuming that you take out a five-year loan to buy the car, you may have more equity after three years than you would if you leased. If you are truly unhappy with the vehicle, this extra equity may help you get a better deal on your next vehicle.

Drive the Car However You Would Like To

After a lease expires, you have to return the car to the leasing company in good condition for its age. This means that a dent to the front panel or a stain that can’t be removed from the backseat of the vehicle could cost you money when you turn the vehicle in. You may also pay a penalty if you go over the mileage limit imposed by the leasing company.

When you buy a car, you can drive it as hard and as much as you want. If the front panel gets dented, it can be repaired when it is convenient for you. If you want to drive more than 10,000 miles in a year, it is your right to do so. Depending on how long the car stays in your possession, it could eventually be passed down to your child when he or she is ready to drive.

Leasing a car may be a good way to save money and ensure that you always have access to a late model vehicle. However, buying may ultimately save you money and frustration in the long run. In addition, it can be used as collateral to get a debt consolidation loan or start your own business. Therefore, it may be in your best interest to strongly consider buying a vehicle the next time that you are in the market for one.