Should You Lease or Buy a Car?

February 28, 2020
woman stepping out of a small red car


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 leasing vs buying a car:

Pros and cons of leasing a car

Pros: Cons:
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

Pros: Cons:
Eventual ownership of car Unpredictable resale value
No mileage limits Higher monthly car loan 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.

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  • Buying / Selling