For some, leasing a car is the best option. For others, financing an automotive purchase is the obvious choice. Discover the pros and cons of each approach before deciding how you want to proceed.
Few people walk into a car dealership and purchase a new vehicle in cash. Nearly everyone takes one of two approaches to financing their vehicles instead: leasing or buying. We’ll go over the pros and cons of each to help shoppers make more informed choices.
Leasing vs. Buying
Let’s start with a basic description of the differences between leasing and buying a car. Lease offers aren’t the same as actual sales. When you lease a vehicle, you pay for the right to use the car for a certain predetermined period. You don’t ever have to purchase it.
When you finance a car purchase, you make payments to a lienholder until you no longer owe money to the lender. At that point, the car is yours, free and clear, and you no longer have to pay to access it.
The Pros of Leasing a Car
Leasing a car comes with both benefits and drawbacks. Lease offers typically have lower monthly payments and lower initial down payments than financing plans, which means drivers will have to spend less money to get behind the wheel of the vehicle of their dreams.
When leasing a vehicle, you’re only tied to it for the duration of the lease, usually two or three years. There’s no need to worry about buyer’s remorse because you can trade up frequently as technology improves.
The Cons of Leasing a Car
When you lease a car, you don’t own it. You’re only paying to access the vehicle and must follow the lease agreement to the letter. When the lease runs out, you must either return the car or take out a loan to purchase it from the dealer.
In most cases, lease agreements contain mileage caps, which means you’ll only be able to drive a certain amount each year before being penalized. You may also be responsible for providing the vehicle with a certain level of upkeep.
The Pros of Buying a Car
When you finance a car purchase, you’re working toward owning it outright. There are no mileage caps because no one can tell you how much you’re allowed to drive your own vehicle, and you are responsible for deciding what kind of upkeep you want to provide.
You’ll own the vehicle free and clear once you finish paying off the auto loan. There’s no need to continue making payments indefinitely. Even if the loan term is relatively long, there will still be an end in sight.
Which Is the Better Option?
There’s a choice that makes sense for every driver. For some, leasing is the better option. For others, financing the purchase of a car is the obvious choice.
Drivers working with strict budgets often choose to lease vehicles because they want lower monthly payments. Those who plan to put a significant amount of miles on their cars are usually better off buying even if the costs are higher since they won’t have to deal with mileage caps.
Ultimately, the decision as to whether to lease or buy is a personal one. Reach out to a local dealership to learn about lease offers and financing options before making a final decision.
