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Buying vs. Leasing

You just found out you're expecting a baby. Or, your current car broke down. Or, you recently got a raise and want a new set of wheels to celebrate. Whatever the reason, you're in the market for a new car. But now comes a tough decision; should you buy or lease? Most financial experts agree that buying a car makes more sense financially, but leasing provides some short-term benefits that may appeal to you. Whether you're looking for the newest toy on the streets, or a solid family-friendly minivan, it pays to weigh the benefits and negatives of buying and leasing.

Leasing Benefits

{}* Lower monthly payments

{}* Lower upfront cost (down payment)

{}* Low maintenance cost, due to warranty coverage

{}* Newer technology and features in car

Buying Benefits

{}* No mileage cap

{}* You own the vehicle and can keep it long past the final payment

{}* Build equity

{}* Ability to modify the car

{}* Less concern over wear and tear

Leasing Negatives

{}* Wear-and-tear charges

{}* Mileage limitation

{}* Higher insurance rates

Buying Disadvantages

{}* Higher down payment and monthly payments

{}* Repair costs once warranty expires

{}* You are responsible for selling the car when you are done with it

If you want to be seen in a new car every few years, leasing may be the way to go. Edmunds recommends signing a three-year lease for the most financially sound decision. But, if you plan on getting a vehicle that will last you for years to come, buying might make the most sense. Your car dealer can help you decide which payment plan will work for you.

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