There are significant upsides and downsides to buying or leasing an automobile, especially if you are retired. Some say it’s better to just buy it outright so you have a clear sense of your finances long-term and that you are 100% the owner of a car.
Others would rather lease a car, pay the monthly rate and enjoy the rest of their money for other things. With leasing, you are almost always able to afford a better car, and if that’s the point of buying a new car, leasing should be the way to go.
Besides, leasing has a couple of age-related advantages that benefit retired citizens. For example, if you continue working part-time after your retirement you can also take advantage of different income tax deductions.
The benefits and drawbacks of leasing or buying a car outright also depend on the way you tend to use your car. If you are primarily going to use it for long-distance driving, potential mileage restrictions usually associated with leasing might push you towards buying the car outright.
Benefits of leasing
If you are not able to pay cash for the car you want, leasing does seem like a better option. Monthly rates and general car expenses should be lower if the car is bought sensibly. Leases can be done with not all that much money, and that’s something you can’t do when buying outright.
Another great leasing benefit for citizens is the ability to walk away from a lease much easier compared to a financing deal or an outright purchase. Life is unexpected, and there are many examples out there when someone’s needs change, and they just need a different car.
As a senior citizen, lower out of the pocket expenses are important. And a lease deal usually covers numerous different expected and unexpected expenses such as warranties, service deals. Sometimes you won’t even have to pay for a new set of tires.
Lease deals are easy to get out of, and that’s something to keep in mind. None of us is immortal, even though we ought to not think about it, if you do choose a financing deal for example when your end comes, the value of the car might be lower than the balance owed, and that can leave your heirs with a deficit.
Benefits of buying outright
The benefits of buying a car outright are way more obvious when compared to leasing or financing. You own the car and you can do whatever you want with it. And that’s something older people appreciate more compared to the younger generations.
The feeling of having your own car 100% is precious to some, and it’s really easy to understand why. You have no mileage restrictions, if you ding or scratch the car, you can repair it or leave it be. With a leased car, you don’t have such commodities.
If one suddenly loses the ability to drive, selling a car is usually the easier and more cost-effective way to get rid of a car compared to terminating a lease early. And having the ability to retain some value afterward is essential.
It all depends on the specific lease deal, and how you and the leasing company agree to go through a possible lease. Buying and leasing both have their own sets of drawbacks and advantages, but it seems like you can benefit the most from a good lease contract.
Used or a new car
The means of acquiring a new car depends highly on the car in question. If you are buying a car outright, buying a used car is generally a better idea. If you want a brand-new car, leasing is the preferred way to go, especially so if the car is hit heavily by depreciation.
Depreciation is the percentage of value a car loses after a designated period, usually 3 or 5 years after purchase. Cars regularly lose up to 50% of the value after 3 years, and depreciation just keeps on as you pile up the miles.
With such a huge value loss, being able to take depreciation into the account while buying a new car is essential, and that’s not something you can do with an outright purchase, only with specific leasing or financing deals.
But if you are interested in a used car that has already been hit with a significant portion of depreciation, especially a certified pre-owned car with a warranty, buying it outright might seem like a better financial decision, but only after you’ve considered all the possible leasing deals.
Which cars are best for seniors?
Senior-friendly cars usually offer a raised-up driving position for easier exit and entry and loads of intuitive and easy-to-understand interior features and technology solutions. Senior-friendly cars are comfortable, soft and offer seats that are easily adjustable and easy on your spine.
Cars such as these are usually equipped with an automatic box as a manual gearbox is not able to take advantage of all the latest safety and comfort features such as auto-braking, adaptive cruise control, or park pilot assistance systems.
Which cars should seniors avoid?
Low slung, stiff, uncomfortable, and loud supercars and sports cars as these types of cars are tasking to drive for everyone, including the younger generations. These cars are also usually expensive to buy, maintain and sell afterward.
Only if you truly love these types of cars, you should consider one. And even then you should consider the one that manages to offer levels of comfort and general ease of driving that correspond to the cars asking price.
Should senior citizens consider electric vehicles?
In theory, EVs are somewhat of a perfect fit for the elderly. They are incredibly easy to drive and they have enough range to satisfy the usual daily commuting associated with senior citizens. They are less expensive to own if you charge them as intended.
But they can sometimes be a bit too hard to understand and overly futuristic for an older person to understand. Maybe the best option should just be to consider a hybrid and maybe later opt for a full-blown EV.