Buy or Lease a Car

Buy or Lease a Car?

If you're in the market for a new car, be prepared for the choices you will face.

What are the advantages and disadvantages of buying or leasing an automobile?

Buying A Car

Advantages	Disadvantages
You own, or have equity in an asset as the car loan is paid off.	You are tying up cash in an asset that is losing value.
You may drive the car as much as you like without paying a per-mile fee.	The car may not be worth much when it comes time to sell it.
If you are going to ‘run your car into the ground,’ buying may be the cheaper way to go.	The older a car gets, the more expensive it is to maintain and the less reliable it is.

Leasing A Car

Advantages	Disadvantages
You have the opportunity to invest the cash that you would have otherwise used for a down payment.	You are making payments similar to rent and have no equity (value of the car) to show for it.
The warranty will likely extend over the full term of the lease; therefore, repair costs could be minimal.	The total amount of miles you drive the car without paying a per-mile fee will be limited.
You only pay for the car for the time you use it. You may be able to drive a more expensive car that you otherwise could not afford to buy.

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