• Buy or Lease a Car: Pros and Cons

    Many people make the decision to buy or lease a car every day. The decision can be both time consuming and difficult as there are many factors to consider before making a final decision. There are also various types of fees which apply depending on the route you choose. Customers should consider their current and future financial situations. Are there any issues coming up which might affect this decision?

    Let’s examine some of the pros and cons of both buying and leasing a car:

    Buying

    Pros:

    • When paid off, the customer owns the car
    • No extra fees, such as over mileage fees and damage fees
    • Lower auto insurance premiums
    • Monthly payments go towards the purchase of the car
    • Generally, maintenance can be performed anywhere
    • Customers can choose the type of insurance coverage for the car
    • Customers can do anything they choose with the car once they leave the dealer

    Cons:

    • Higher monthly payments
    • Customer pays for all maintenance
    • Higher maintenance costs as the car gets older
    • The manufacturer’s warranty may run out while the customer owns the car
    • Higher upfront cost
    • In order to purchase the car, customers must secure a loan

    Leasing

    Pros:

    • Maintenance is included in the monthly payment
    • Customer can change vehicles at the end of the lease agreement (Usually 1-2 years)
    • The manufacturer’s warranty does not end while the customer is leasing the car
    • Lower upfront cost
    • The customer does not have to take out a loan in order to purchase the car

    Cons:

    • Lease agreement limits the number of miles traveled per year and who is authorized to work on the vehicle
    • The car must be returned at the end of the lease agreement with a full tank of gas to avoid fees
    • Monthly payments go towards the usage and maintenance of the car
    • Higher auto insurance premiums
    • Customers must have full auto insurance coverage for the car
    • The customer cannot do whatever he or she chooses with the car

    Taking the time to consider these pros and cons will help in the decision making process. When considering leasing a vehicle, please take the time to read the entire lease agreement. There may be things in the agreement which conflict with your lifestyle or your plans for the vehicle.