Leasing vs Buying a Car Pros and Cons: Which Option is Best For Me?

leasing vs buying a car pros and cons

Leasing vs Buying a Car Pros and Cons

When you need a new car, there’s one question you have to confront: do you want to lease or buy a car?  To arrive at a decision one should weigh both sides of leasing vs buying a car pros and cons.

man test driving a lease car

There are many differences between leasing and buying a car. Countless forums are dedicated to trying to figure out whether or not someone should lease or buy a car.

But the truth is, the decision is a very personal one. We’d like to help you out by telling you both the pros and cons of both sides.

Leasing a Car

Pros

  • Monthly payments are often lower than what you would have to pay otherwise.
  • The future value of the car isn’t important to you.
  • At the end of the lease, you have the ability to walk away much easier if you decide you want a different one.
  • You’re not as responsible for payments as you would be with loan payments.

Cons

  • You have to return the car at the end of the lease or buy it.
  • If you want to terminate the loan, it can often be expensive.
  • Most leases limit the number of miles that you can drive.
  • Leases will hold you responsible for any wear and tear, and you’ll often have to pay extra charges.

man test driving a car

Buying a Car

 

Pros

  • You get to keep the car for as long as it works and/or as long as you want it.
  • If you dislike the car later for whatever reason, you can sell it.
  • The cash value of the car is yours.
  • You don’t have to worry about the number of miles that you drive.

Cons

  • You have to pay more up front.
  • Monthly payments are higher than what you might pay when leasing a car.
  • If the car is damaged, you’ll have to pay to buy a new one and won’t be able to sell the car to help with the cost.
  • Dealing with selling or trading a car is often stressful, and can be hard to get your money’s worth.

man texting while take car purchase road test

Should I lease or buy a car?

There are many things you should consider when trying to decide whether you should buy or lease a car. Some of these things include:

  • How much you’re willing and able to spend up front
  • How much you’re willing and able to spend monthly
  • Whether or not you want to be able to customize your car
  • How often you drive/how much mileage you’ll be using
  • How accident prone you are
  • Exactly how rough the roads you drive on are
  • Whether you’re the type to drive a car until it breaks or get bored and move on to something else.

Ultimately, though, the decision between leasing vs buying a car pros and cons is up to you. So, as much advice as we can give, it’s a personal decision that you will have to make based on a number of factors, some of which might be completely unique to you.

But no matter what decision you make, credit will ultimately be a part of it. And if you’d like help with that, I hope my website can give you some of the information that you need.

Get Control of Your Credit With Our Free Ebook

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4 Comments

  1. This was a wonderful and extremely informative article about the pros and cons of buying vs. leasing a car! 

    I know so many people who actually lease, and then trade in every so many years.

    I’ve always owned my own car. However, I didn’t realize that car payments are higher than when you lease.

    I’m contemplating buying a new car, but after reading this, I might think about leasing.

    Thanks so much for such a great post!

    Blessings:)

    Suzi

    • Hi Suzi,

      If your making a decision to buy or lease, you really need to understand what kind of car buyer you are.

      Like your friends, if you plan to drive a car for a couple of years and turn it in, then a lease is more than likely your best option.

      If you keep a car for a long time them buying it is the way to go.

      The only caveat to all this is your budget.  If you have limited resources for a down payment and need an affordable monthly payment then leasing may be your best option.

      If you have monetary limitations and don’t wish to lease, I would recommend trying to find a good reliable used vehicle and pay cash.

      I know that Dave Ramsey is a big fan of this approach and with no car payment you can do other things with the extra money you have to pay down debt or save for retirement. 

      Thanks for commenting on the post.

      Patrick

  2. I have always wanted a nice concise summary of the differences between leasing and buying a car.

    We live in a busy world and often come to the realization that renting or leasing something might be less hassle than owning something when we really are just leasing it from a bank.

    The rules are different and your site is very informative and helpful in understanding that difference so someone can have an educated viewpoint before going to the dealership.

    • Sometimes it’s just best to keep it simple.  There are different pros and cons to leasing versus buying.  You just have to do the research, then make the best choice that’s right for you.

      I kind of agree with your statement that leasing something might be less of a hassle than owning.  There are many downsides to owning, including maintenance and upkeep, insurance, real estate taxes and the like.

      Many times a lease can be a better decision for you.  Like you pointed out, homeowners are only leasing it from the bank or from the local county taxing authorities.

      The only true downside to leasing is that you can’t build equity in something you rent. Many folks have clear advantages when they have equity in their homes.  They can use home equity loan products to make improvements, buy a car or send their kid to college.

      Thanks for your comment.

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