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Pros and Cons of Leasing vs. Buying a Car

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When you are ready to purchase a vehicle there is a lot to think about. Once you decide what vehicle you want, the next decision is to determine financing. You may be thinking of leasing a vehicle instead of purchasing it. Leasing has its place in the auto finance world but it is not for everyone. Every person’s situation is different and people love options. Neither leasing nor buying is always the better choice 100% of the time. Here we will go over some pros and cons of both leasing and buying a car.

Leasing Pros
  • Lower monthly payments
  • Excitement of driving a new car every two or three years
  • Always have the latest safety features and always have a warranty
  • You don’t have to worry about trading and selling used cars

The leasing pros list may not be very long however the list carries a lot of weight. The lower monthly payments can be up to 60% lower than your monthly payments purchasing the same vehicle. The warranty is also a huge plus. It can be extremely frustrating when your newly purchased vehicle has a major mechanical problem shortly after the warranty runs out, with a lease you never have to worry about it.

Leasing Cons
  • You must have a stable predictable lifestyle
  • Drive a set number of miles
  • Consistently maintain your car properly
  • Most leases require gap insurance
  • Pay more over the long haul to get the lease benefits

Having a constant payment does require a stable predictable lifestyle. Losing your job or a major medical expense can really upset your finances. When you have a lease it is harder to get out of the contract verse selling your purchased vehicle. Leases also have lots of terms you have to meet or you will have to pay fees. Simple things like driving too many miles or procrastinating on normal maintenance can cost you extra. All the fine print can also cause you a lot of headaches trying to understand it all.

Buying Pros
  • Have ownership of your car
  • Drive as many mile as you like
  • Customize your vehicle anyway you like
  • Build up some trade in or resale value
  • Have the option of driving your car for years to spread out the cost
  • You can be better prepared for unexpected lifestyle changes if your car is paid off
  • Don’t have to worry about the risk of possible lease end charges
  • You have the option of paying off your loan and being payment free for a while

Ah, the ability to do whatever you want whenever you want without the fear of fees is a great feeling. Drive as much as you want and customize until your heart is content, you own your vehicle. As long as you are committed to driving your vehicle for an extended amount of time, you are unlikely to lose in the cost effective category.

Buying Cons
  • Higher monthly payments
  • You will probably have unexpected cost of repairs after the warranty has expired
  • Eventually you’ll have to trade or sell your used car

The cons of buying a vehicle are minimal and excepted as a fact of life for most people. Every one of the buying cons can be eradicated by the pros of leasing, but of course then you exchange them for the cons of leasing. Leases are cheaper in the short term however in the long term a purchase is most definitely cheaper. Weighing the pros and cons will help you come to the decision that is right for you and your family.

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