Purchasing a new car requires a lot of decision-making, but before you get into which model, what color, and everything in between, you have to decide whether to buy or lease. When you buy a vehicle, you own it and can keep it for as long as you want it. When you lease a vehicle, you don’t own it and must return it at the end of the lease. However, you can buy it when the lease is up, if you choose. (For more about the differences between buying and leasing, visit www.consumerreports.org.)
According to Cars.com, about 80% of auto consumers experience the freedom of owning their own car by paying for it with cash or financing the purchase with a loan, but there are many others who sacrifice ownership in order to enjoy the short-term benefits of leasing. Both buying and leasing have their own set of pros and cons.
For example, when you buy a car, you have immediate or eventual ownership, the freedom to modify or sell it, and an eventual end to payments. However, until you’re finished paying it off, monthly payments are higher than those of a leased vehicle.
When you lease a vehicle, you have much lower monthly payments, but you’ll always have them. You’ll also have a smaller down payment and no up front sales tax fee, but you will have to pay fees for exceeding a certain amount of miles and for any wear and tear.
Remember, there is no right or wrong answer to the question of whether you should buy or lease your new car. Ultimately, it comes down to what’s best for you and your situation. For more information about buying or leasing a vehicle, visit www.marketwatch.com, where you’ll find pros and cons for each type of purchase and questions to ask yourself when deciding which route to take.