Financing vs. Leasing A Car As A Self-Employed Personal Trainer: The Ultimate Guide
What to do about financing vs. leasing a car as a self-employed personal trainer? As a personal trainer, you need a reliable mode of transportation to get to your clients. You may be wondering whether to finance or lease a car.
Both options have their pros and cons, and the choice ultimately depends on your personal circumstances.
In a previous article, we dove into ‘Buying A Home As A Self-Employed Personal Trainer’.
In this guide, we’ll explore the benefits and drawbacks of financing and leasing a car, and provide anecdotes and context that are relevant to self-employed personal trainers.
Financing A Car As A Self-Employed Personal Trainer
Financing a car involves taking out a loan to purchase the vehicle. You make monthly payments to the lender until the loan is paid off, typically over a period of three to five years.
- Ownership: When you finance a car, you own it. You can customize it to your liking, and there are no mileage restrictions.
- Equity: As you make payments on the loan, you build equity in the car. Once the loan is paid off, you own the car outright, and you can sell it or trade it in for a new one.
- Lower Total Cost: Over the long term, financing a car may be cheaper than leasing. Once the loan is paid off, you no longer have monthly payments, and you can continue to drive the car for as long as you like.
- Higher Monthly Payments: The monthly payments for a financed car are usually higher than for a leased car, since you are paying for the entire cost of the car.
- Higher Up-Front Costs: When you finance a car, you typically have to make a down payment, which can be a significant expense.
- Depreciation: Cars depreciate in value over time, and when you finance a car, you are responsible for the depreciation. This means that the car may be worth less than what you owe on the loan, which can be a problem if you need to sell the car or trade it in before the loan is paid off.
Leasing a Car As A Self-Employed Personal Trainer
Leasing a car involves paying a monthly fee to use the car for a fixed period of time, typically two to three years. At the end of the lease term, you return the car to the dealership.
- Lower Monthly Payments: Monthly lease payments are typically lower than finance payments, since you are only paying for the use of the car during the lease term.
- Lower Up-Front Costs: When you lease a car, you typically don’t have to make a down payment, and the upfront costs are generally lower than when financing a car.
- New Car Every Few Years: When you lease a car, you can trade it in for a new one every few years. This means you can enjoy the latest technology and safety features without having to buy a new car every few years.
- Mileage Limits: Leases come with mileage limits, which can be a problem for self-employed personal trainers who drive frequently. If you go over the mileage limit, you may have to pay extra fees.
- No Ownership: When you lease a car, you don’t own it. This means you can’t customize it, and you are limited by the terms of the lease agreement.
- Excess Wear And Tear Fees: When you return a leased car, the dealership will inspect it for excess wear and tear. If there is damage beyond normal wear and tear, you may have to pay extra fees.
What Should Self-Employed Personal Trainers Consider?
As a self-employed personal trainer, you need a car that is reliable and meets your needs. Here are some things to consider when deciding whether to finance or lease a car:
- Mileage: If you drive frequently, leasing may not be the best option for you, as you will be limited by mileage restrictions. Financing may be a better choice if you need to drive long distances frequently.
- Upfront Costs: Consider the upfront costs of both options. Leasing may have lower upfront costs, but financing may be more expensive initially, depending on the down payment required.
- Long-Term Plans: Think about your long-term plans. If you plan on keeping the car for a long time, financing may be a better option as you will eventually own the car outright. If you prefer to drive a new car every few years, leasing may be a better choice.
- Tax Benefits: Self-employed individuals may be able to take advantage of tax benefits when financing a car. Check with a tax professional to see if this is an option for you.
- Personal Preferences: Consider your personal preferences. Do you like to customize your car? Do you prefer to always have the latest model? These factors can influence your decision. To go deeper into understanding your preferences, we highly recommend answering George Kinder’s 3 Questions For Life Planning – which are discussed here in this podcast episode, ‘Financial Coaching & Life Planning Goals For Personal Trainers‘.
Final Thoughts For Self-Employed Personal Trainers
There is no one-size-fits-all answer when it comes to financing vs. leasing a car as a self-employed personal trainer. Both options have their pros and cons, and the decision ultimately depends on your personal circumstances.
To make the best decision for your needs, consider your mileage, upfront costs, long-term plans, tax benefits, and personal preferences.
Whichever option you choose, make sure to do your research and shop around for the best deals. Don’t be afraid to negotiate the terms of the lease or the financing agreement. And, as always, make sure to factor in the cost of insurance, maintenance, and repairs when calculating the total cost of owning or leasing a car.
Of course, don’t forget to make sure whichever route that you take – it fits into your ‘Budget As A Personal Trainer‘. Furthermore, if you need tips on how to more effectively start saving money as a self-employed personal trainer, we’ve got you covered in this article – ‘How To Save Money As A Self-Employed Personal Trainer‘.
At the end of the day, your car is a tool that helps you do your job as a self-employed personal trainer. Whether you finance or lease, make sure to choose a car that meets your needs and helps you succeed in your business. And don’t forget to enjoy the ride!
Additional Reads & Resources:
11 Personal Finance Tips For Personal Trainers That Are Self-Employed
Buy or Lease? An In-Depth Look At The Costs Of Buying And Leasing A Car
Should You Consider Car Leasing When You’re Self Employed?
Tax Advantages Of Leasing Vs. Buying A Car
For additional resources, you can always visit The MVMT Life Planning Blog, The Human Potential Podcast, and the Life Planning For Personal Trainers podcast.