Planning on acquiring a new or used vehicle in the future? You’re not alone — millions of Americans buy or lease new and used cars every year. While you may be focused on determining the make, model and year of the car you want, there’s another critical decision to make about this transaction: whether to buy or lease.
Roughly one in four people decide to lease a car, but there are advantages and disadvantages to this option. One advantage of leasing is that you’re typically driving a late model car that is still covered by the manufacturer’s warranty, so repairs, oil changes and other maintenance may be covered.
Lease payments are usually lower than the payments would be to purchase the same vehicle, and you can often afford to lease a more expensive vehicle than if you were to buy it outright. Many people prefer to lease because they can drive a new car off the lot every several years and they don’t have to worry about depreciation or trade-in value.
Buying a car, on the other hand, offers advantages as well. First, after you pay off the car, you own it outright. That means if you keep your car for longer than your financing term, you don’t have to make car payments while you continue to drive the car, possibly for years. You can also drive as many miles as you please, while leases typically limit the number of miles you can put on the vehicle every year.
Additionally, when you buy a car, you don’t need to worry about wear and tear affecting its value when you return it at the end of the lease. Plus, you can customize it the way you want, and sell or trade in your vehicle whenever you like. When you lease a car, however, you typically cannot end the lease early without paying a penalty, even if your driving needs change in the interim.
To decide whether leasing or buying is the best option for you, consider what type of vehicle you’re interested in, how long you plan to drive the car, how many miles you will put on it, the costs, and how important driving a newer model is to you. Weighing the pros and cons of each option can help you make the decision that works for you, your budget and your lifestyle. For more information, check out the accompanying resource.
Infographic created by O’brien Toyota
