Should you buy, lease, or use a car subscription?

Should You Buy, Lease or Use a Car Subscription?

You need to have a vehicle, but you’re hesitant about buying one and getting into debt.

You might have heard that leasing can be a better deal. And some friends have told you how easy car subscriptions are. You just sign up and the car is delivered to your door!

So you may be asking yourself which is better for you: Should you buy, lease, or use a car subscription?

In this article, we’re going to define what leasing is, take a peek at what a car subscription is, and discuss which option may be better for you.

What is car leasing?

When you lease a vehicle, you sign a contract to use it for a period of time and make monthly payments. You don’t own the car, which means you can get a newer car at a (seemingly) lower price without the high down payment.

While it’s true that your monthly lease payment is lower than a car loan, remember that at the end of the day you don’t own anything. That means you’ll always have car payments.

Additionally, leases can come with other limitations, such as the number of miles that you can put on the car in a year. And if you wear the car out more than what the dealership considers normal use, you will also be fined.

When is car leasing a good idea? If you only plan to drive a car for a few years, then leasing is a good option. However, if you plan to have the vehicle for longer, it may not make financial sense to pay every month and not own anything in the end.

What is a car subscription?

Kind of like Netflix for vehicles, a car subscription lets you have the joy of owning a car without actually owning it . . . or facing the long-term debt.

The service charges a monthly fee and may conveniently put everything under one roof, including insurance, a limited warranty, roadside assistance, and vehicle maintenance. The ease and simplicity of these apps make them popular. Most of these services do require a deposit or startup payment.

When is a car subscription a good idea? Ask yourself: do you need a car just for the short term? Do you have to avoid going into long-term debt? Then a car subscription might be for you. However, remember that while the costs might seem lower, in the long run you will pay more money.

What is the best option for you?

The best financial deal is always to purchase a pre-owned vehicle with cash. Why? Because you avoid the drop in value when a new car is driven off the lot. You also avoid paying interest on a loan. And you own your vehicle, which can be considered an investment.

However, if you just need a vehicle for the short term or you need to avoid a high down payment, leasing or a car subscription may be the best option.