What’s better about buying a car than renting one? Cars are one of the biggest ticket items that the average person has. It’s a huge financial decision, so you’ll need to make sure you choose the right option to get a car. The two main methods are to lease or buy a car.
Is it better to buy a car or rent a car? We have always advocated buying rather than renting a car. In this guide, we’ll tell you 10 reasons why you should buy a car instead of renting one.
Quick definition: lease vs. buy
Before we get started, let’s quickly define what a lease is and what you need to buy a car.
Rentals are available directly from car dealerships. It is essentially a program that allows you to rent a car for a long time. They will offer different lease terms from 18 months to 39 months. At the end of the term, you no longer pay the monthly rent and return the car and keys to them.
When you first sign a lease agreement, you agree to make a certain amount of down payment, as well as a certain monthly payment. These payments continue until the lease expires.
Buying a car is something that more people are familiar with. You find a party with a car, and you give them money or agree to a monthly payment plan until the car is fully paid off. At the same time, you can operate the vehicle and do whatever you want.
Cars can be purchased through dealerships, third parties, or directly from private sellers. For a car purchased with financing, the payment term is usually between 5 and 10 years.
10 reasons to buy a car instead of renting one
Is it better to buy a car or rent a car? There are a lot of opinions when it comes to owning and operating a vehicle. You can talk to three different people and they will give you three very different opinions. We want to make your decision easier by providing you with 10 easy-to-understand reasons why we choose to buy instead of rent.
#1: If you buy second-hand, the price will be lower
If you buy a used car, you can save a lot of money over renting any car. As you probably know, the depreciation value of a car is quite high. This means that a car quickly loses its upfront value simply because it is being driven.
The rule of thumb is that a car that is 4 or 5 years old is only worth 50% of its initial list price. This means that you can instantly save half the value by simply buying a used car.
Since the average lifespan of a car is 12 years, this is not a big deal. If you take good care of your car, it will last longer. Leasing options are usually only available for brand new cars with huge MSRP.
#2: The car is yours
What’s better about buying a car than renting one? Perhaps the best reason to buy instead of lease is that the car is yours. Just driving your own car feels different – don’t worry about messing it up and then someone else will be mad at you.
It’s a bit like borrowing a power tool from a neighbor instead of owning it. You just treat it differently and don’t really enjoy it.
#3: Modify your car freely
Listen up, fellow modders. With leasing, you don’t have the option to modify your car. The dealer wants to repossess the car in exactly the same condition as if it had left the showroom floor.
This means that if you use window tints, custom mufflers, any body modifications, or aesthetic upgrades, you’ll need to remove them before the lease ends.
This does not apply for purchased cars. You can do whatever you want with your car (which is legal, of course). This allows you to customize your driving experience and get the most out of your vehicle. This reason alone is enough for many people to buy and not rent.
#4: Sell and replace your car quickly
There are a million reasons why someone might want to replace their car. Get a job that pays better, lose your job, make a major life change, make a big move on a national or global scale, or just get tired of cars. With a purchased car, your car will never slow you down in your life.
With a lease, it’s really hard to get rid of the car prematurely. There are only a few reasons, such as relocating due to active duty military status, that can allow you to terminate your lease early. Otherwise, you’ll be in trouble with everything you owe, or your credit score will take a huge hit.
If you just stop paying for the rental and return it to the dealership, they won’t accept it, then the car will be repossessed, you will receive a large bill in the mail, and your credit will be significantly reduced.
You can try subleasing the car to someone else. This means that they will take over your contract and pay for the remaining months. However, there are also a lot of regulations for this idea. Some dealers don’t allow subleases at all, and others only allow subleases for certain months of the lease agreement.
Long story short, it’s hard to get out of a lease early without a lot of problems. On the other hand, buying a car is as simple as transferring laundry. If the car pays off, it’s a matter of finding a buyer and finding another car you like. If you’re still making payments, you can apply for a personal loan to pay off the car, get the money from the buyer, and then pay off most of the loan before finding another car.
You also don’t have to wait for this change at all. If you really want to, you can decide to sell your car the day after purchase.
#5: No mileage limit
Most rentals have a maximum number of miles you can add to the odometer each year. A standard lease allows you to choose between 10, 12, and 15,000 miles per year. If you exceed the limit or even a mile, you will start paying out of pocket once you get in the car.
The extra mileage usually costs around 25 cents per mile. This means that adding 1000 miles at the end of the lease term will result in a $250 fee. If you really go overboard, you’ll see how quickly that adds up.
There is no mileage limit for the purchased car. You can drive hundreds of thousands of miles on your car each year without charging extra to the person you provide the car. This is great news for people who love to travel or business people who are always on the road.
#6: Payment is finally over
Is it better to buy a car or rent a car? If leasing is their preference, habitual renters will jump from one rented car to another. For these people, the payments are never-ending. There will be a mailing bill for their vehicle every month. If you rent enough in a row, this could mean paying for a car for 20, 30, or even 40 years per month.
Obviously, once the vehicle is paid off, the payment stops on the purchased car. If you buy a car with cash upfront, it means that you never have to pay for the car. This frees up more cash each month to do whatever you want.
The only cost you have to pay is maintenance, but the cost of renting a car is the same.
#7: Leases still require paid maintenance
What’s better about buying a car than renting one? One of the big myths in the automotive world is that rental cars are maintenance-free. The assumption is that if anything happens to your car, the dealer will swipe the card. At the same time, drivers can enjoy a maintenance-free world.
Unfortunately, this is not the case. In addition to a special oil change procedure, the person renting the car will be in a difficult situation with every maintenance. Some lease agreements are very strict about how often the car needs to be maintained and the oil changed. This can actually lead to more money spent on maintenance.
To be fair, both leased and purchased cars usually come with the same warranty for the new option. However, these warranties do not cover routine maintenance, and they will eventually be terminated.
#8: Avoid stupid “over-wear” charges
A lot of people get messed up when they turn in their cars at the end of the lease agreement. At that time, the dealer will inspect the car and determine the damage caused. Anything that is considered “excessive wear and tear” will become an issue for the renter to deal with.
Dealers will charge you for this wear and tear, and there’s really no way to fight it. There’s also no clear limit to what they can charge you. Due to scratches and dents that you think are standard wear and tear, you may receive thousands of dollars in bills.
Keep in mind that this is a person doing an inspection and determining the cost at will. All you need is a PO’ed inspector who has a bad day, and you’re hit with huge fees.
This is another way in which leasing becomes more expensive than buying a car. With a bought car, you can smash it to the side with a sledgehammer and you won’t owe anyone extra money. We don’t know why you did that, but we’re not going to stop you.
#9: Allow others to drive your car
Did you know that many leases only allow one person to drive the vehicle? The lease will bind one driver and specify that the insurance will only cover the car while that driver is driving.
This can lead to a very painful and expensive problem in the future. The only way to avoid it is to refuse to let other people drive your car.
With the car you bought, it’s much easier. Insurance doesn’t care who is driving, it will still protect the vehicle by the registrant’s name. There is no legally binding document that prohibits your friend or spouse from driving your car.
This means that if you buy a car, you can have a drink at a bar and have a sober friend drive you home, but not if it’s a lease.
#10: You can buy from private sellers
What’s better about buying a car than renting one? Purchased cars also unlock the ability to purchase through private sellers. In case you didn’t know, a private seller is an individual who lists their vehicles for purchase directly through them. It avoids the need to go to a used car yard and deal with those salespeople.
With leasing, your only option is directly through a dealership. Buying a car allows you to pick and choose the option you want. Generally, private sales offer a lower price for the exact same vehicle sold from a dealership.
Dealers can only make money when they sell their cars for more than what they are worth. They have to keep the lights on and pay the workers, so it makes sense. Private sellers don’t have all of these additional costs, and it’s usually easier to negotiate as well.
Depending on why the person wants to sell the car, you can convince them to accept a price that is thousands of dollars less than the list price, and everyone will walk away happily.
Pro tip: Never buy a car after renting
Some people consider getting the best of both worlds and then buy the car they just rented. Car dealerships offer a “rental-buy” program in which they will give you a quote to purchase a car at the end of the lease.
Keep in mind that this phrase is almost always insulting. They believe that drivers create a personal bond with the car, so they are more willing to pay more for the car.
It’s a luxury to know that you’re the sole owner of the car and that you already know everything about the car. However, this luxury is not worth the extra charge they try to charge you.
The truth is that this model is actually the worst of the two options. First, you’ll have to pay for the lease, which means you’ll be responsible for all the depreciation costs and provide the dealer with extra cash. Then, you pay a premium price for the car, again giving the dealer extra cash.
In most cases, you won’t even be able to negotiate the buyout price. If you fall in love with your car during the rental, simply look for a private seller of the same car after you hand over the keys. You will save a lot of money.
Conclusion
Is it better to buy a car or rent a car? Now you know more about buying and renting a car. We usually recommend buying a car. Our 10 reasons should help you defend your choice and make the right choice. Check out the rest of our blog for more tips on how to buy a car and make sure you have the right tools and accessories to keep your car running forever.
