So the big question for many people looking for a new car is, should I buy or lease? It is a good question that has plagued many of us buying new cars for years. Yes you can save some money every month by leasing a car but you are paying for something that isn’t yours, it is almost like a glorified rental car that you have to pay for every month. But some people like to trade their cars in every 2-3 years so they don’t want to buy something to keep especially in the way a car depreciates in value. Luckily you have come to the right place to help you figure out if you should lease or buy that new car you are looking at on the show room floor.
I am just going to cut straight to the point and list off the pros and cons of buying and leasing. Here we go:
Advantages of leasing a car
- Lower monthly payments
- Lower down payment
- You can drive a better car for less money each month.
- You can more easily drive a new car every two or three years.
- You pay sales tax only on the portion of the car you finance.
Disadvantages of leasing a car
- You don’t own the car at the end of the lease.
- Your mileage is limited to a set amount, typically 12,000-15,000 miles a year (excess miles are paid for at the lease termination).
- Leasing is more expensive in the long run (as opposed to buying and driving until the wheels fall off).
- Wear-and-tear charges can add up (paid at lease termination).
- It’s costly to terminate a lease early if your driving needs change.
- You are basically paying to rent a car.
Advantages of buying a car
- Pride of ownership — you can modify your car as you please.
- Car buying is more economical in the long run unless you buy and trade-in regularly.
- No penalty for driving excess mileage
- Increased flexibility — you can easily sell the car whenever you want.
- If you drive the car well after you are done with your finance term it will be A LOT cheaper.
- The monthly payments eventually end once the car is paid off.
Disadvantages of buying a car
- Higher down payment is generally required.
- Higher monthly payments
- You’re responsible for maintenance costs once the warranty expires.
- The car depreciates in value every year you own it
- Trade in of the car wont net you as much as you hope.
So there you have it, in my own opinion I think leasing a car is a waste of money, for people who drive around clients may need to lease a car to keep it new every few years and you can have a luxury car for an affordable price. Also, usually once you start a lease you always end up leasing because it is a viscous cycle of returning and re-leasing a new ride which means you will pretty much always have a car payment. I am the type of person that likes to pay for something I can own eventually and not have to make payments anymore. I hope this helps with your car buying decisions. What are your opinions on leasing and buying? Let us know in the comments below!