If you’re in the market for a new car, you may be debating whether to buy or lease. It’s a big decision. After buying a house, a new car is the second biggest purchase most people will ever make.
To help you through this milestone, here are the pros and cons of each option:
Pros and cons of leasing a car
|No or low down payment||Excess mileage penalties|
|Usually covered by warranty||Fees for excessive wear and tear|
|Lower monthly payments||Early lease termination fees|
|No upfront sales tax fees||Generally higher insurance premiums|
|No depreciation concerns||Monthly payments|
Summary: If you like always driving the latest models or don’t have the credit or money to buy a new car, leasing may be a smart option.
Pros and cons of buying a car
|Eventual ownership of car||Unpredictable resale value|
|No mileage limits||Higher monthly payments|
|Ability to sell car anytime||Post warranty maintenance expenses|
|Freedom to customize/modify||Depreciates over time|
|Generally lower insurance costs||Large down payment|
Summary: If you plan to keep your car for a long time, modify it or drive a lot of miles, it makes more sense to buy.
If your decision is based strictly on dollars and cents, use our auto loan vs. lease calculator to calculate your monthly payments.