Buying VS. Leasing: What's The Difference?


When it comes to getting a new vehicle, is it better to buy or lease? This seems to be the question that many people struggle with when it comes to their new car. If you purchase a vehicle, your monthly financing payments will be higher but you will eventually own the car. If you decide to lease, you will pay less each month but the payments never end. It’s similar to buying a house and paying a mortgage vs. renting an apartment and paying rent. But what is the best option for you? Here are a few more differentiating factors:


Ownership

When you buy a vehicle, you own it and can keep it as long as you want. If you decide to lease, you can use the vehicle until its lease is up and then you have to return it to the dealership.


Monthly Costs

If you buy a car, you typically pay higher rates each month in order to pay off the entire price of the vehicle plus other accumulated fees. Monthly lease payments aren’t usually too high, but you will never fully pay it off. Instead, you must return the car once the lease is up.


Vehicle Termination/Return

Buying a car allows you to sell or trade it in whenever you want, however you are on your own for this selling process. If you decide you want a new car, terminating a lease early can be very costly, but the advantage of a lease is that you only have the car for a certain amount of time then get to trade it in for something different.


Future Value

When you buy a car, you must keep in mind that its value will decrease over time and when you do decide to sell, you won’t get as much as you bought it for. When you lease, you don’t have to worry about vehicle depreciation because you don’t own it. 


Wear and Tear

If you own the vehicle, you don’t have to worry about its condition unless you are trying to get a high resale value down the line. When you lease a car however, you are responsible for any additional wear and tear that isn’t negotiated in the lease. 


Courtesy of Consumer Reports

Categories: New Inventory, People, Finance

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