If you’re in the market for a new car, you may be debating whether to buy or lease. It’s a big decision. After buying a house, a new car is the second biggest purchase most people will ever make.
To help you through this milestone, here are the pros and cons of each option:
Pros and cons of leasing a car
|No or low down payment||Excess mileage penalties|
|Usually covered by warranty||Fees for excessive wear and tear|
|Lower monthly payments||Early lease termination fees|
|No upfront sales tax fees||Generally higher insurance premiums|
|No depreciation concerns||Monthly payments|
Summary: If you like always driving the latest models or don’t have the credit or money to buy a new car, leasing may be a smart option.
Pros and cons of buying a car
|Eventual ownership of car||Unpredictable resale value|
|No mileage limits||Higher monthly payments|
|Ability to sell car anytime||Post warranty maintenance expenses|
|Freedom to customize/modify||Depreciates over time|
|Generally lower insurance costs||Large down payment|
Summary: If you plan to keep your car for a long time, modify it or drive a lot of miles, it makes more sense to buy.