Leasing vs Buying

Leasing usually makes for substantially lower monthly payments than a conventional purchase of the same car. However, leasing is more complicated financially than a regular car loan and will not work for some peoples needs. In fact, we have a whole section here dedicated to helping you understand leasing to help you get the best deal if you decide to lease.

Leasing is probably an option to consider if you:

1. Want to drive a new car every 2-3 years.
2. Prefer to have your car under warranty the whole time you own it.
3. Average less than 15,000 miles/year
4. Are good about following the factory recommended maintenance and keeping your car in good shape.
5. Would prefer having a lower monthly payment but are comfortable with the fact that your long term cost will be higher on average that someone who keeps their cars for 5-10 years.
6. Are willing to put in a little time to understand how leasing works (so that you aren’t negotiating your lease at a huge disadvantage)

Buying is probably a better option if you:

1. Drive substantially more than 15,000 miles per year.
2. Like to keep your cars 5 years or longer.
3. Prefer to make higher payments for the term of the loan but be payment free once the loan is paid. OR Would rather pay cash for the car in order to not have to have a car note.
4. Want to be able to customize your car with non-dealership aftermarket options (you must return your car in the condition in which it was purchased aside from normal wear and tear).
5. Want to have an asset to trade in down the line at your next vehicle purchase.

If you are considering leasing and are not already very familiar with the process, please make sure and read our comprehensive Leasing Guide. If you don’t understand leasing lingo and how leases are calculated you are at a huge disadvantage in negotiating a lease.