If you’re on the fence about whether to buy or rent a car, you’re not alone. Even many people who have already made up their minds seem unsure, because they either don’t have all the facts or they aren’t entirely sure they can trust the facts they do have. The truth of the matter is that there are so many variables involved with this decision that it can be hard to know what information to trust and which things aren’t worth worrying about at all.
How Much You Drive?
How much you drive will play an important role in your decision. If you’re not putting many miles on your vehicle, it might make more sense to buy. But if you drive every day, owning may be cheaper over time. Our data shows how many miles each type of driver drives each year on average, so you can decide which is right for you. (Note: This is an updated version of our study from 2017.) According to our research, most people drive about 12,000 miles per year—about five times as much as they fly. And those who do fly tend to rack up even more air miles than drivers do. While some people travel frequently for work and have no choice but to rent cars when they go out of town, others simply prefer flying because it’s faster and easier than driving.
When Can You Afford To Buy A New Car
If you’re looking to purchase a new car, rather than lease one, there are four main variables that determine when you can afford to make such an investment:
• your income level;
• how much debt you already have (credit cards, student loans, mortgage);
• any savings for retirement or emergencies; and
• your budget for monthly payments.
To calculate these figures accurately, use an online budget calculator to figure out what kinds of payments you can afford.
The Pros And Cons of Buying A Car
Buying a car can be expensive and time-consuming. Between signing papers, talking to dealers, and negotiating for a better price, buying a car can take weeks or even months. In some cases, it may make more sense to buy used than new: Not only is it often cheaper, but there’s also less wear-and-tear on your wallet.
On top of that, you get a warranty with most cars—so if something goes wrong with your vehicle in the first few years of ownership, you have some recourse. Plus, when you buy from a dealership, you don’t have to worry about finding another buyer when you decide to sell down the road.
The Pros And Cons Of Taking A Car on Rent
Buying vs. renting a car has its pros and cons—both financially and practically—so it’s important to weigh your options before deciding on one over another. On one hand, buying can be more expensive upfront but will cost you less in maintenance, fuel, insurance and loan interest down the line. On the other hand, renting can cost significantly less per month, but you won’t have full control over when you drive it or how far you take it each trip.
While it might seem counterintuitive to buy a car with prices on new cars declining, making that purchase can help you save a considerable amount of money in gas and maintenance over time. If you know you’ll be keeping your car for at least a year, buying is likely your best bet. On the other hand, if you’re more uncertain about how long you’ll keep a vehicle or how much usage you’ll get out of it, then renting is likely a smarter choice.
Although you might be tempted to roll down your window and shout I’m going to buy a car!, it pays to take some time to weigh your options. If you know that you won’t be keeping a vehicle for more than 18 months, then renting is probably your smartest bet.