Pin Me

Buying vs. Leasing a Car

written by: •edited by: Jason C. Chavis•updated: 4/29/2011

Should you buy the car or should you lease the car? That is a question that has baffled car shoppers for many years. The truth of the matter is that there isn’t one standard rule of thumb for every car shopper on the market.

  • slide 1 of 5

    Car Lot 

    While there are pros and cons when it comes to buying versus leasing a car, there is no singular correct answer when it comes to making a claim of which is a better option. The best solution depends on your personal situation and your personal preferences.

  • slide 2 of 5

    Leasing

    Pros

    Some people enjoy leasing because it allows them to drive a brand new car during the best years of the car’s life. If you have a good credit history, there is a great chance you can lease a car without having to hand over a large sum of cash up front.

    Leasing a new car is almost a guarantee that you will have low maintenance costs. Plus, leasing often comes with a three-year warranty. Overall, leasing is a great choice if you have a steady budget.

    Cons

    Leasing is not always the most financially sound solution – especially if all you are looking for is a solid means of transportation. At the end of the lease, typically you can either purchase the car or lease a new one. Studies show that if you decide to lease three new cars within a 10-year period, you will usually spend a much larger amount than if you were to simply purchase the automobile. That said, you will be driving new and low-maintenance vehicles, whereas with a bought car you will probably make some major repairs towards your seventh, eighth and ninth years.

  • slide 3 of 5

    Buying

    Porsche 

    Purchasing a vehicle can be expensive at the beginning because you will have to make a large down payment, take out a loan and pay interest rates. If your car then depreciates in value, you may have a hard time selling it in later years. Although at the end of the term, you will be the owner of the car – unlike the leasing option.

    The bottom-line is that you should always look at the big picture before you buy or lease a car. The best choice should be compatible with you lifestyle and your budget.

  • slide 4 of 5

    Resources

    leaseguide.com, http://www.leaseguide.com/lease03.htm

    smartmoney.com, http://www.smartmoney.com/spending/autos/to-buy-or-to-lease-7868/

  • slide 5 of 5

    Image Credit

    Flickr/emilio labrador

    Flickr/cosmic_spanner