To Buy or to Lease a Car? The Advantages and Disadvantages of Both

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To buy or to lease a car: that is the question. When it comes time to get a new car, many buyers are faced with a decision: should I buy or lease a car? Which is better? Honestly, both leasing and buying have their advantages and disadvantages. Since a lot depends on your personal situation, there isn’t always a perfect answer to the question of whether to lease or buy. Below are some advantages and disadvantages for both leasing and buying that can help you decide whether you should buy or lease a car.

Advantages to Leasing a Car

1. A Better Car – with leasing, you can drive a better car for less money. 
2. Lower Monthly Payments – your payments will be lower, and usually there is a lower – or even no – down payment.
3. Taxes – when leasing, you wind up paying less sales tax
4. Lower Maintenance Costs – when you lease a car, you will always be under the vehicle’s included factory warranty. Therefore, your repair costs will be lower than with a car you purchase.
5. Most Recent Models – since leases only run for 2 to 3 years, you can get a new car every time meaning you will be driving the latest and newest models.
6. No Trade In Hassle – when the lease ends, you do not have to deal with the hassles of trading in your car for a new one. 

Disadvantages of Leasing a Car

1. No Ownership – you will not own the car at the end of the lease. Although there is the option to buy the car at the end of the lease, often times you will end up paying more in the long run.
2. Limited Mileage – with leased cars your mileage is typically limited to around 12,000 miles per year. You do have the option to purchase more miles, but it will cost you.
3. Extra Charges – if you put excessive wear-and-tear on the leased vehicle, you may be in for a costly surprise once the lease is up. 
4. Termination Fees – if for some reason you need or want to end the lease early, it is quite costly.
5. More Expensive Overall – in the long run, you will often wind up paying more on a lease than you would buying a car and keeping it for years.
6. As Is – when leasing you do not have the freedom to modify the car at all. You cannot add features such as a new stereo, tinted windows or alarm.

Advantages of Buying

1. You can modify your car as you please. If you want to tint the windows, change out the stereo system, add new rims, you’re free to do so.
2. You can drive as much as you like. There is no limit on or penalty fees for excessive mileage.
3. You can use the car as a trade-in on the next car you buy.
4. You can sell the car whenever you want, giving you more flexibility.
5. You’ll save money over the long term if you decide to buy.

Disadvantages of Buying

1. In most cases, car payments are higher than lease payments.
2. You are responsible for all repair costs once the original or extended warranty expires.
3. You have to pay a higher down payment when purchasing to avoid owing more than the car is worth.
4. When it comes time to sell, you risk facing possible trade-in or selling hassles and haggling.
5. You will have more of your cash tied up in the car which depreciates in value.

As you can see, both scenarios have their own unique set of advantages and disadvantages. What it really comes down to when deciding whether to buy or lease a car is personal choice, your own lifestyle and how you prefer to pay for things. When you are ready to decide, visit Lynch Chrsyler, Dodge, Jeep, RAM and check out their selection of new and used cars.

Images courtesy Tim Pierce via Flickr