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Buying vs. Leasing a CarNotes From The Road

Buying vs. Leasing a Car
By John LaBrie/autoMedia.com

Which is Right for You? -
 
To buy or to lease? Increasingly, that is the question that thousands of car shoppers face every year. The answer, however, isn't so clear-cut. Buying and leasing both have their own advantages and disadvantages, and which is best for you depends on your lifestyle, expectations, and budget.

Buying a vehicle means that you own it, which carries both certain freedoms and responsibilities. Some of the advantages:
  • You can customize the car. Adding aftermarket items, such as a new audio system, performance or dress-up modifications, or comfort and convenience features, can make the vehicle more comfortable and fun to drive.

  • Increasing equity. As you pay off the loan, you have more equity in the vehicle, which can be used as a down payment on the next car.

  • You can sell the car at any time. When leasing, turning the car in early will incur costly penalties.

  • No mileage worries. When leasing, you get charged for mileage over the agreed-upon limit.

  • No extra wear-and-tear costs. You don't have to pay additional money if the car suffers excessive wear and tear, such as interior stains or paint scratches (although the resale value will go down).

  • No payments, eventually. After the loan is paid off, you can drive with no car payments, although repair bills tend to increase as the vehicle gets older.

  • Higher monthly payments. Since you're paying for the entire worth of the vehicle, you'll pay a higher monthly payment than if you were leasing the same vehicle. Although at the end of the loan, you still have something of worth.

  • Disposing of the vehicle. When it's time to get a new car, you first have to sell or trade in the one you own. This can mean more time, hassle, and/or negotiations at the dealership.

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