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Buy or lease a car - what is better


What is better: to buy or lease a car? Advantages and disadvantages of buying or leasing a vehicle.

The decision whether to buy or lease a car will depend on many personal factors, such as how much you are willing or able to put up front as a down payment, how many miles you drive per year or how often you want to change your vehicle for new one. It is always good to sit and write your list of preferences or needs and decide which is more important for you and what you can live with.

Pros of leasing a car

If you lease you pay usually lower down payment compare to buying the same type of vehicle. It is especially good for those who have current cash needs. In addition, your monthly payments also are lower because you paying off depreciation of the car and not full cost.
After expiration of the lease agreement you can just pick other new car and sign other contract. You don’t need to spend your time on trying to sell the old auto or face potential repairs that are not covered any longer with manufacturer’s warranty.
Driving a car which is not older than 24 – 36 month makes the lease a very attractive option.


Cons of leasing a car

You might pay large penalty if you need to get out of the contract earlier. Therefore, if you have unstable situation at home and/or work, it is better do not bind yourself in the lease agreement.
There are extra charges and fees for driving over the limit. Usually leased cars allow 12,000-15,000 miles per year depending on the dealer and type of contract.
You will spend more overall money while leasing the car than when financing it for the same period with option to sell it in the future.

You shouldn’t lease if:

- you have a big family it might not be a good idea to lease, because there is more chances to damage the car inside for what you might have to pay additional money to cover that and the total cost of lease will increase.
- you drive not many miles per year (less than their limit), because you will pay for depreciation you didn’t cause and just throwing savings away.
- you plan or predict to move.

Advantages of buying a vehicle

Your payments go towards owning your car after what you can do with your auto whatever you want, such as keep, sale, or present to someone. In addition, you can reduce the cost of your purchase by selling the vehicle or exchanging old with new one. Even if your auto is that old that only a junk yard can take it, you will still get some money for the vehicle.
You don’t need to return your car and worry about extra cost for damages and miles limits.
When your payments term is over and the car paid off you are the owner and free to do with a vehicle whatever you want.

Disadvantages of buying a vehicle

The main disadvantage of buying a car is initial expenses. It is good if you have savings to buy a car with no financing – you are not paying interest and even can get a better price for a vehicle. But with no money down it might be even hard to get a low interest rate and the down payment is usually much higher comparing to a lease option.
As an owner you are responsible for the vehicle and its future sale or exchange whether you have time to do it or not.


Buy for savings

I leased couple vehicles, but not anymore. And it’s not because of money. It seems you can lease cheaper only if the vehicle is expensive and the lease term no longer than 2 years. But in reality it is not as many might think looking only at numbers at dealership. Look, all your money you put down and paying every month is a waste. I’m not even putting any numbers, but let say, you are paying about $6,000/year leasing and keeping car 3 years – it is 18,000 and you are getting nothing. If you will buy in a three years car will lose value maybe about the same you are paying for a lease, but keeping it longer make sense – most models updating in a 4-5 years, so you still driving latest model. But anyway, many buying a car not because of the price we pay, but because we like to drive new and expensive vehicle. People who want to save buy for cash used one and driving it you 10 years and that is saving.

You are not losing much with

You are not losing much with 0% finance if buying. But yes time matter most. Car will decrease in value first years the most and longer you keep it the more you save. Only one thing, it might not have much of a sense to lease cheap car. Even though lease will be least expensive paying a little over hundred a month while purchasing makes more sense. But as for me, you have to get what you can afford. I would lease a new luxury car every year, but unfortunately my bank account not big enough.

buy or lease car

It is very personal thing whether to buy or lease a vehicle. There is no right or wrong decision about it. When customers lease a car normally they will deal with an operating lease which has length less than a useful life of an auto. Sometimes people might consider having a capital lease which has a lifetime period of the vehicle. After such lease individual can whether to buy it out for certain amount which should be discussed at the very begging of the lease term or buy it out for fair market value. Normally with the second option the lease will have less monthly payments compare to first one.

It is just two types of

It is just two types of finance options. Which is better impossible to say because too much factors and most of all customer preferences. Lease is not always the most expensive choice. If you are looking for savings than pay cash – you might even get much better deal. But if you prefer a new car every 2 years than lease might be better. What might be better for one customer won’t work for other at all. The point is always look at all options and make sure it will work for you before signing the papers.

From my experience lease is a

From my experience lease is a least flexible option and it didn’t work for me as I expected. Well, maybe was still young. Ok, you are paying for nothing is a one side, but another you are stack with you payments for 36 month and 12,000 mi/year at least it was in my case. So, think twice if you drive more, and if you will have some scratches on the bumper they will make you to pay for that. Come on, are you driving your car only on special occasions and rest of the time keeping in the garage. Do not buy that BS at dealership trying to get the “best possible finance or lease option” especially for you and only today. If you do not have enough buy used one and cheaper. If you have enough for luxury than buy it without their “low finance option for well qualified customers”, but lease… do not think it is the best idea.

It’s all depend what you are

It’s all depend what you are looking for. Some people eating peanut butter and jelly, but want to drive $80,000 car and it is actually might be cheaper to lease for a short term the vehicle compare to buy it.