Should I buy or lease a new car?

The decision whether to lease or buy a car definitely has financial implications. But there are also personal factors you should consider. There are pros and cons for both sides of the lease vs. buy argument and by checking out both of them, you can decide what works for you.

By purchasing a vehicle you can:

• Pay less over the long term. Monthly lease payments are usually lower than monthly car loan payments. But, with each loan payment, you build equity for the future when you decide to sell it or trade it in. 
• You can sell the car if you want to. You get to decide whether to keep, sell or trade the car as long as you off any existing loan balance.
• You won’t have a limit of how many miles you can drive each year.
• No mileage limit. Leases put maximums on the number of miles you can drive and charge a fee when you exceed the limit.
• You can modify and maintain the vehicle in whatever way you want. Leased vehicles have to be kept in the same condition as when you initially leased it. 

Advantages of leasing:

• The biggest advantage is usually lower monthly payments. The cost to lease a car is typically much lower than to finance one. Little or no down payment is usually required.
• When you lease a car you rent it for a fixed term, which is typically two to four years. During that time, depreciation is built into the lease payments and you can never end up owing more on the vehicle than when you turn it in. When you buy a car, there may be a period of time when you are “upside-down,” on a vehicle, where you owe more than your car is worth.
• Fewer repair expenses if you’re covered by a manufacturer warranty during your lease term, you don't have to worry about getting hit with a large, unexpected repair bill. But, you're still responsible for regular upkeep, maintenance, and the auto insurance required by the state laws.
• You get to drive a new car more often. By leasing a new vehicle every few years, you will always have the benefit of driving a car with the most up-to-date technology, comfort, and safety features.
• Not having to sell a vehicle. Once your lease term expires, you simply return the vehicle or choose to initiate a new lease for a different vehicle. But you never have to go through the hassle of selling a vehicle yourself.
• It may be easier to be approved for a car loan. Leasing companies may be less strict than financers because they can easily take back the vehicle if you can't make payments.

To learn even more, check out this information from Consumers Reports by clicking here.