When deciding between buying or leasing a car, it’s often helpful to write out a list of the pros and cons. Lucky for you, we’ve done the work for you! Please check out the chart below:
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Buying |
Leasing |
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Ownership |
You own the car and can keep it as long as you want. |
You don’t own the car but get to use it for a predetermined amount of time. It must be returned unless you decide to buy it. |
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Up-front Costs |
The cash price or a down payment, taxes, registration and other fees. |
The first month’s payment, a refundable security deposit, down payment, taxes, registration and other fees. |
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Monthly Payments |
Loan payments are usually higher because you’re paying off the entire purchase price of the vehicle, plus interest and finance charges, taxes and fees. |
Lease payments are almost always lower because you’re only paying for the vehicle’s depreciation during the lease terms, plus rent charges, taxes and fees. |
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Early Termination |
You can sell or trade in your car at any time and use the money from the sale to pay off any loan balance. |
Ending your lease early will likely mean having to pay early-termination charges which may be just as costly as keeping your contract. |
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Vehicle Return |
You are responsible for selling or trading in your car when you want a new one. |
Just return the car at the end of the lease, pay any additional costs and walk away. |
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Future Value |
The vehicle depreciates, but its cash value is yours to use any way you want. |
The car’s future value doesn’t affect you financially, but you have no equity either. |
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Mileage |
Drive as many miles as you want. |
You’re limited to the number of miles you can drive each year - typically 12,000 - 15,000. You have to pay a per/mile fee if you go over. |
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End of Term |
At the end of your loan term, you’re done! You also have some equity in the car that’s yours. |
At the end of the lease, you have to finance the purchase of the car, another lease or the purchase of another car. |
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Customizing |
You can modify the car - fancy wheels, stereo, bumper stickers - any way you want. |
Any modifications you make must be removed before you return the car. You’ll have to pay for any residual damage caused by removing it. |
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