Should You Buy or Lease a Car?

Modern suv on tuscany way

When it’s time to get a new car, deciding between leasing and buying can be tricky. Both options comes with pros and cons based on your car wants and needs. Before heading to the dealership, learn the difference between leasing and buying, as well as which option is best.

When Should You Lease

Leasing is appealing in many ways, but is it the right option for you?  Think about your budget.  If you have a low monthly cash flow and don’t have much savings, payments on a rental tend to be lower each month.  While some places ask for a small down payment, most don’t require one.  Some leasing agents even include free or cheap maintenance of the vehicle during the lease period. Lower payments means more savings for you.

I you know you are only going to need the car for a shorter period of time, such as a year or two, then leasing is a great short-term option. Leasing is also the perfect option for someone who does not drive very far or often.

Leasing is also a great option for those who like to impulse buy. If you’re interested in a vehicle, considering leasing before agreeing to a purchase. This will give you a better feel for the car, and you can decide if it’s the right vehicle for you.  If you end up not liking it, you can simply return it.

Pros of Leasing:

  • Lease payments are lower than loan payments.
  • Typically there is little or no deposit required.
  • Get a new car every couple years.

Cons of Leasing:

  • You don’t own the car and can’t make modifications.
  • You can penalized for mileage, wear and tear.
  • You don’t own the car, so the payments do not end.

When You Should Buy

If you want a long-term option for a car, buying is almost always the better option.  The longer you own the vehicle, the more money you save through buying.  If you drive a lot, buying will garner you more savings.  When leasing, you are often penalized for putting excessive mileage on the car or causing wear and tear.

Buying a car offers a lot more flexibility on the part of the buyer.  For one, you can make any modifications and changes to the vehicle you wish.  If you want to change the paint color or add fancy new rims, you can.  If you want to order custom decals and add a spoiler, you can do that as well.  All vehicle decisions are left completely up to you.

If you decide you no longer want the car you bought, you can sell at any time, even if you are financing.  You aren’t bound by any contract requiring you to keep the car for a specific amount of time.  With leasing, it is very difficult and expensive to end a contract early.

Pros of Buying:

  • You own the vehicle and make all decisions regarding it.
  • It’s more cost-effective in the long run.
  • There is no mileage penalty.

Cons of Buying:

  • Higher down payment and monthly payments.
  • Maintenance costs are your responsibility.
  • The value of the car will depreciate.

Now that you understand the benefits of both buying and leasing, you should be able to determine which option is best for you.  Overall, buying a car is typically the cheaper option in the long run.  But there are circumstances in which leasing has its advantages.


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