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What's better for you - leasing or buying?

Car Buying vs Car Leasing | CarMax

Eager to buy a car, or are you looking to lease? Whether to lease or buy your next vehicle is a good question, and it’s one you’ll want to take the time to research.

Whichever route you choose, you’ll want to be satisfied with your vehicle — and your ownership agreement!

Keep these tips in mind as you consider your options.

Leasing a Car

Car Buying vs Car Leasing: Leasing | CarMax

CarMax doesn’t lease vehicles (except at our two Toyota dealerships, for new Toyota vehicles). There are pros and cons to leasing a new car or truck.

Pros

  • Monthly lease payments can be more affordable than finance payments.
  • If you don’t plan to keep your vehicle for more than a few years, leasing gives you the opportunity to turn it in at the end of your lease term.

Cons

  • Most lease terms place limits on the number of miles you can drive without paying a penalty.
  • When your lease is up, you return the car and any equity it might hold (unless you exercise an option to buy it).
  • You’re typically responsible for wear and damage that exceeds limits set by your lease contract.

Buying a Car

Car Buying vs Car Leasing: Buying | CarMax

If you’re looking to buy a car, you’ll typically also enter a financing agreement (unless you’re paying the full cost up front). Some things to consider if you’re buying a vehicle:

Pros

  • You own the vehicle after you’ve met the terms of your finance contract.
  • Once you’ve paid off the amount you owe on the vehicle, the equity in your car is yours (you can sell it and pocket the cash).
  • You don’t have to worry about paying penalties for exceeding annual mileage limits.

Cons

  • Your monthly payments are often higher than lease payments.
  • Wear and tear could affect your car’s value when you sell it or trade it in.

If you like having the option to drive a different car every few years, leasing might be for you. On the other hand, if you plan to drive a lot of miles, keep your car, and eventually use its equity toward a down payment on another vehicle, buying might be a better option.

If You're Financing a Car

Car Buying vs Car Leasing: Financing | CarMax

Unless you’re paying in cash, in full, for your purchase, you’ll enter a financial contract where you make payments over time. The finance articles below can help you understand the process.