Buying vs. Leasing

When purchasing a new car, one of the main things to consider is whether to lease or buy the car. Although many people believe that leasing a car is more expensive and a waste of money, this is not always the case. Here is a look at buying versus leasing, and which option is right for you.

How long do you plan on keeping the car?
• Many years: Buy. If you will keep the car for years after it has been paid off, buying is the best option. This will allow you to one day own your car and be free of car payments, and will make the car less expensive than a lease.
• A few years: Lease. If you plan on trading in your car before it is paid off, as many people do, you are actually losing money. The ability to get a new car every couple years is one of the main benefits of a lease, so if you will be looking for a different car in a few years, leasing is the way to go.

How much can you afford?
• Low monthly payments and low maintenance: Lease. A major upside to a lease is the lower monthly cost. Leases typically have a lower down payment, monthly payment, and low maintenance fees. There are also no upfront sales taxes, and leasing a car can offer tax advantages for business owners.
• High monthly payments: Buy. If you can afford high monthly payments, you should be able to pay off a car relatively quickly. Just make sure you can also afford costly repairs after the warranty expires.

How far do you drive your car each year?
• Less than 15,000 miles: Lease. Most leases restrict the mileage you can put on a car each year to 15,000 miles, or sometimes less. But if you do not travel more than this, it will not be an issue.
• More than 15,000 miles: Buy. If you do go over the allotted mileage, you will be charged for each extra mile, which can really add up.

How well do you treat your car?
• Poorly: Buy. You will be responsible for any damage that is caused to a leased vehicle. So if you know that you do not have a good track record with cars, buying is your safest option. You should also buy if you want to do any customization.
• Well: Lease. If you keep your cars clean and take good care of them, there should not be any issues.