Loans Vs Leases

Mood swings, arrogance, irresponsibility, and the desire for independence, or the questionable interpretation of it, a car, often characterizes adolescence. The inevitable question of how to pay for the purchase surfaces, means of doing so including loans or a lease. Wall Street Journal article The New Math of Car Leasing, CNBC Explains article Loan vs. Lease: What's Best for Drivers, and U.S. News article Buying vs. Leasing discuss the assets and disadvantages of the two. The process of reaching a consensus upon the issue of whether loans or leases are more effective integrates attributes such as interest rates, maintenance fees, and equity. With such factors in mind, leases prove to be more beneficial to consumers as it provides several benefits

(Anadiplosis) The aid loans provide is limited in its provision of adequate support regarding the economical aspect of the matter, evident in CBNC Explains' study on the purchase of a car by means of a lease as opposed to using a loan. The results illustrate how "the savings [with a lease] can be significant... $5,404.39 less than buying." Leasing a car also enables drivers to "save on maintenance costs since new cars tend to break down less often." (Wall Street Journal) The fact that "many leases last about three years, which is typically the length of many new-car bumper-to-bumper warranties" (U.S. News) contributes to the reduced cost as well. Repairs during the lease are covered under warranty, substantial as maintenance fees and such accumulate over time. The nature of leases, consumers returning the car to the dealership after an established time to renew the lease or to purchase or lease a new car, (apposition) allows individuals access to updated safety, comfort, and convenience features, gaining possession of the "latest and greatest" technology and safety

One can argue buying a car provides equity as opposed to leases. When the lease expires, the individual will have to return the car to dthe ealership, a system that provides no equity. However, buying a car risks negative equity, "a loan on a car [in which] the car is worth less than what the loan is for [resulting in] negative equity. (U.S. News) In such, the resale value does not compensate for the loan. The lease ensures that an individual can “simply turn in the car and walk away,” quite beneficial to the consumer as it allows them to exchange their car without worrying about resale and trade values or negative equity. Thus, in consideration of the benefits and disadvantages that both loans and leases possess, leases prove to be more useful to consumers as the individual saves money on the initial payment and the months following the