There are a lot of decisions to make when it comes to shopping for a used car. Should you buy a used car? Maybe you want a new one? Should you rent or buy? How does renting a car work?

Even though buying a vehicle means higher monthly payments and requires more upfront cash, do your math and you’ll see that in most cases, buying a lightly used vehicle makes more financial sense at long term. However, not everyone is interested in the long term, and there are situations where buying a vehicle is not the best option.

Here’s why we’ve compiled the pros and cons of renting or buying a car.

How does renting a car work?

Leasing a car is similar to the concept of long-term leasing. This involves an agreement with a rental company that allows you to drive a vehicle for a set number of kilometers and a fixed monthly payment. This does not mean that you cannot exceed the mileage granted, however if you exceed it, you will have to assume additional costs at the end of your rental. Unlike financing a vehicle, your monthly payments do not create equity. There are several elements of a lease that you can negotiate, including your monthly payment, your interest rate, the number of miles you can drive, and the remaining residual value at the end of the lease, which you decide to buy it.

Get more information on residual value and whether you should buy out your lease. .

Advantages of renting:

Owning a vehicle is expensive whether it’s new or used, and leasing is a way for many people to reduce monthly car operating expenses.

Renting a car is a good option for you if:

• You like to change your car regularly: If you quickly get bored of your cars and enjoy driving the newest models with the latest technology and features, then car rental is the right option for you.
• You love driving a new car: A lot of people just can’t afford to buy the car they want. Since lease payments are often lower than finance, this allows many drivers to drive a fancier vehicle than they could buy.
• Monthly payments are a major concern: Monthly expenses are a big concern for most people and it can be difficult to add additional expenses to their budget. Leasing makes possible the opportunity to drive a brand new car for smaller payments than if they had simply purchased it.
• You don’t have to travel long distances: People who don’t drive long distances don’t have to worry about the mileage the rental gives them and possible overages.

The advantages of buying:

As discussed before, buying a lightly used car is less expensive if you plan to keep it for more than a few years. Owning a car also gives you the freedom to drive as much as you want, to make modifications and to use the vehicle as an ultimate asset.

If you have enough money in the bank to pay cash for your car, this will give you some bargaining wiggle room when negotiating the price. If you don’t have enough money to pay in full (like most of us) you can get a loan to finance the car through the dealership, a finance company or even with a line. personal credit.

Buying a car is usually a good option for you if:

• You plan to keep the same car for the long term: The main difference between leasing and buying is that when you buy a car and the payments are complete, the vehicle is yours debt-free. You can take advantage of the time without payments and when it comes time to change, you can use the vehicle as an exchange which can help in price negotiation or make a down payment on your next acquisition.
• You want to modify your car: If you are into vehicle modification such as lowering the car, modifying the exhaust or air intake or adding special tires, buying is your option. If you’re renting a car, you’ll have to reverse all the modifications before the end of the rental, which means you’ll have thrown all the money spent on the modifications out the window.
• You spend a lot of time behind the wheel: Owning a car means you don’t have to worry about mileage limits, you can drive as much as you want!

There is no simple answer to the question whether it is better to rent or buy. It depends on your priorities, your financial situation and your preferences. Take the time to analyze the pros and cons to decide what is best for you.