Should I Buy or Lease a Car?

Should I Buy or Lease a Car?

November 09, 2019

If you’re in the market for a new car, you may be debating whether to buy or lease. It’s a big decision. After buying a house, a new car is the second biggest purchase most people will ever make.

To help you through this milestone, here are the pros and cons of each option:

Pros and cons of leasing a car

No or low down paymentExcess mileage penalties
Usually covered by warrantyFees for excessive wear and tear
Lower monthly paymentsEarly lease termination fees
No upfront sales tax feesGenerally higher insurance premiums
No depreciation concernsMonthly payments

Summary: If you like always driving the latest models or don’t have the credit or money to buy a new car, leasing may be a smart option.

Pros and cons of buying a car

Eventual ownership of carUnpredictable resale value
No mileage limitsHigher monthly payments
Ability to sell car anytimePost warranty maintenance expenses
Freedom to customize/modifyDepreciates over time
Generally lower insurance costsLarge down payment

Summary: If you plan to keep your car for a long time, modify it or drive a lot of miles, it makes more sense to buy.