Everything to know about buying versus leasing a car

One of the biggest questions when it comes to getting a new car is if you should lease or buy. It’s a question many people struggle with because there are pros and cons to both scenarios. Getting a new car, no matter which way you do decide to go, is an important decision as a car will be one of the bigger expenses in your life. The Balance has some pros and cons to consider. We’ve summed them up here:

Pros of leasing:

• Since you will most likely turn in your car at the end of your lease, you will not need to worry about selling or trading in your car, which can be a difficult and tedious task.
• Leasing a car means you will have lower monthly payments than a typical car loan.
• Usually leases are between two to three years, which means you can switch up the model and make of your car after your lease is up. This can be fun for avid car lovers.

Cons of leasing:

• There is a limit to the number of miles you can drive over the course of your lease. This means if you go over, then you will have to pay more for the additional miles.
• You must have a stable and predictable source of income and credit line to be able to lease in the first place
• If you lease over many years, you will probably pay more than if you would have purchased the vehicle.

Pros of buying:

• You will be the owner of your car and, therefore, can drive as many miles as you want and take care of your car as you see fit.
• If you buy a car, you can build up a trade-in or resale value eventually.
• Since you won’t have a lease, you can drive your car for as long as you like to spread out the cost – even if the monthly payment might be more.

Cons of buying:

• There will be a higher monthly payment.
• There will probably be more repair costs later on since you are more likely to still be driving the car after the warranty expires.

Obviously, there are other factors such as your location, family and financial situation that will go into the decision making as well. Best of luck!