Determining whether to buy or lease a car can sometimes be a confusing process. Many factors should go into your decision, so take a look at this guide to help you decide.
Buy
Buying a car has many advantages. First, once you pay off your vehicle, you'll actually own it. Thus, the possibility also exists for your to be free of monthly car payments. Owning provides the freedom to modify a vehicle as you see fit (install aftermarket parts, repaint it, etc.). You'll also have the freedom to drive as you please; you can rack up the miles, wear and tear on your car without having to worry about dealer overage fees. However, the freedom that comes with buying can come with a few drawbacks. Owners generally pay higher monthly amounts for car financing and car loans than those who lease. Buyers must also be ready to pay for repair costs, once the car exits its warranty period. Finally, when a car owner decides to purchase a new vehicle, he or she must deal with the process of trading in or selling their old vehicle.
Lease
A decision to lease a car can also have its advantages. Usually, newly leased cars have warranties that coincide with the lease term, saving the lessee the hassles of dealing with repairs. Leases also provide relatively lower monthly payments, lower down payments and the ability to easily get new vehicles frequently (not having to deal with trading-in/selling old cars). Lessees may also save some money on taxes, when compared to car buyers. However, leased vehicles require the driver to monitor the car's usage. Most leases have a limit to the amount of miles a lessee can put on the car in a year, and mileage overage fees and excess wear fees can end up costing you a lot of money, if you're not careful.
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There is no set option that is best for everybody. In order to make the right decision for your lifestyle, consider the differences in buying and leasing and see how they apply to you.
Is it Cheaper to Lease and then Buy the Leased Car, or to Buy it New?
In the end, the price difference between buying a car outright or if you buy leased cars will be minimal. A monthly payment on a leased vehicle will almost always be lower than a car payment when you finance a vehicle. The residual payment of the lease will even out this difference when it comes time to purchase the vehicle at the end of the lease. Leasing a vehicle is often a good idea if you are not sure you want to purchase the vehicle. It gives you three years to decide, and if you choose not to buy, you can simply return it to the dealer at the end of the lease.
