Buying vs. Leasing
PUBLISHED THURSDAY, AUGUST 30, 2018
What's better for you - leasing or buying?
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
There are pros and cons to leasing a new car or truck.
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.
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
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:
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.
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
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.