is-it-better-to-buy-or-lease-a-car-it-depends-720-ytshorts.savetube.me
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00:00With today's economy, finding ways to save money on big purchases is more important than ever.
00:06If you're in the market for a new car, you've probably heard the old debate.
00:11Should you buy or lease?
00:13But what if I told you there's a way to make the smartest financial decision for your specific needs?
00:19In this video, we're going to break down the pros and cons of both buying and leasing.
00:24We will not just talk about monthly payments.
00:27We'll cover tax incentives, depreciation, resale value, and by the end, you'll know which option is best for you.
00:34Stick around, because we will share insider tips that could save you thousands of dollars on your next car.
00:50We all know owning a car comes with responsibilities beyond just the sticker price.
00:55You've got to think about maintenance, repairs, insurance, and even how much that car depreciates over time.
01:02If you're planning to buy, remember, you're aiming for the long haul.
01:06After the car is paid off, you'll have years of driving without a monthly payment, which can really ease your budget.
01:13So, if you're someone who likes to hold onto a vehicle and avoid future car shopping, buying could be a great option.
01:21Leasing for lower payments
01:23Now, if your goal is to keep those monthly payments as low as possible, and you like driving a new car every few years, leasing might be perfect for you.
01:33On average, leasing can reduce your payments by $100 or more a month compared to buying.
01:39But here's the catch. When the lease is up, you walk away with no equity.
01:45So while your payments are lower, you'll need to budget for a new car every two to three years.
01:50Not building any long-term value here can be a downside, but there are perks to leasing that we'll explore further down the list.
01:58Tax incentives for electric vehicles
02:01Here's where things get interesting.
02:03If you're looking at an electric vehicle or a plug-in hybrid, leasing might be the way to go, thanks to tax breaks.
02:10Many states offer tax credits that make leasing an electric vehicle much more affordable than purchasing.
02:16What's more, federal tax credits up to $7,500 can be applied to EV leases without the same restrictions you'd face if you were buying.
02:26So, if you're eco-conscious and love the idea of a brand-new electric vehicle, a lease might be your best bet.
02:34The true cost of a car loan
02:37Buying a car outright might sound appealing, but most people don't have $50,000 sitting around for a new car.
02:44The average car loan term in the U.S. is now six years, with an average interest rate of 7.1% for new cars.
02:53Let's say you're eyeing a $40,000 vehicle.
02:56After a six-year loan, you could end up paying $10,000 or more in interest alone.
03:02But on the flip side, once that loan is paid off, you own the car and can drive it payment-free for years.
03:09That long-term benefit is why buying remains a smart choice for many.
03:14Depreciation, a major factor
03:17Now let's talk about depreciation.
03:19That's when the value of your car drops over time.
03:22Most cars lose about 20% of their value the minute you drive them off the lot.
03:27But here's something a lot of people don't know.
03:30Some cars depreciate slower than others.
03:33For example, Toyota Camry and Honda Civic tend to hold their value better.
03:38So if you plan to sell your car after a few years, buying a vehicle that depreciates slowly could actually save you a lot of money in the long run.
03:46Leasing two cars back-to-back
03:48So what happens if you lease two cars consecutively over six years instead of buying one?
03:54In a leasing scenario, you're essentially paying for the car's depreciation.
03:58This means that after two three-year leases, you'll have no equity built up.
04:03The cost? About $5,000 more than if you had financed a car outright for six years.
04:09But here's the upside.
04:11Lower monthly payments, the latest technology, and fewer concerns about long-term maintenance since you're constantly driving new models.
04:19Hidden lease fees
04:22Leasing can seem like a cheaper option up front, but beware of the extra fees.
04:27Most leases come with mileage limits, typically around 15,000 miles per year.
04:33Go over that, and you could be hit with fees ranging from 15 to 30 cents per mile.
04:38That may not sound like much, but if you're driving 5,000 miles over the limit each year, those charges add up fast.
04:46And don't forget wear-and-tear fees, which could sneak up on you at the end of your lease term.
04:51Buying a used car
04:54If saving money is your top priority, buying a slightly used car could be the perfect solution.
05:00You'll dodge the heavy depreciation that comes with a brand-new vehicle, and you can still build equity over time.
05:07For example, buying a three-year-old Toyota Camry could save you thousands off the sticker price of a new one,
05:14and with proper maintenance, you could easily drive it for another 7 to 10 years.
05:19Sure, you may miss out on some of the latest features, but the savings can be worth it.
05:25Flexibility and freedom
05:28One of the biggest advantages of buying over leasing? Flexibility.
05:33When you own your car, you can drive it as much as you want, customize it, and sell it whenever you're ready.
05:40With a lease, you're locked into a contract.
05:43If your life circumstances change, like if you start driving a lot more for work,
05:48getting out of a lease early can be expensive and complicated.
05:52That's why ownership is often the safer bet for those who like control and flexibility.
05:58Leasing electric vehicles
06:00The hidden savings
06:02Here's a secret many people overlook.
06:04Leasing an electric vehicle can offer tremendous savings.
06:08Thanks to government incentives and tax credits,
06:11leasing an electric car like the Tesla Model 3 or Hyundai Kona EV could be far more affordable than buying one.
06:18These credits aren't always available to buyers due to complex regulations,
06:23but when you lease, manufacturers can apply the full credit to your monthly payments.
06:28This could be the best way to drive a brand new EV at a fraction of the cost.
06:32So, there you have it.
06:35Whether you're leaning towards buying or leasing,
06:37the choice really depends on your financial situation and lifestyle.
06:41If you're all about long-term savings, buying is usually the best bet.
06:46But if you love driving new cars and keeping your monthly payments low,
06:50leasing might be perfect for you.
06:52Whichever option you choose, remember to weigh the pros and cons carefully.
06:57Don't forget to like and subscribe if you found this video helpful,
07:01and let us know in the comments if you've had any experience with leasing or buying a car.
07:06Thanks for watching. See you in the next one.