Should you lease or buy your next car? Many people automatically assume that buying a car is the smartest decision because it allows them to actually retain ownership of the vehicle. However, there are both pros and cons associated with buying and leasing. To better understand which option is right for you, you should familiarize yourself with the following.
Monthly payments are typically lower when leasing a car as opposed to buying one. According to Edmunds, the average monthly car payment is just under $500, whereas the average lease payment is about $420. So, if you're looking to keep your monthly payments low, you may want to consider leasing.
The greatest benefit of buying a car is the simple fact that you get to own it. As long as you make payments according to schedule, you'll own the car. In comparison, leasing allows you to use the car for the term of the lease, after which you must return it to the dealer or vendor from which you leased it.
When leasing a car, the dealer or vendor will typically cover all major maintenance. From oil changes and transmission fluid flushes to wheel alignments and tire rotation, you can rest assured knowing that the dealer will foot the bill. When buying a car, you are responsible for all maintenance unless it comes with a warranty.
You might be surprised to learn that leasing a car typically comes with mileage limits. It's not uncommon for dealers to limit the number of miles you can drive a leased car to just 12,000 or 15,000 per year. If you go over this limit, the dealer may charge you extra. Of course, there are no mileage limits when buying a car. You can drive it for as long as you want without repercussion.
It's also worth noting that buying a car gives you free reign over all modifications and customizations. You can install a turbocharger in the engine bay to boost its horsepower, or you can install a body kit to improve its aesthetics. Normally, leasing a car prevents you from making such modifications. Dealers and vendors want the vehicle returned in its original condition so that they can turn around and re-lease or sell the vehicle to another customer.
Finally, you don't have to worry about the value of your car depreciating if you lease it. It's said that a new car loses 11% of its value immediately after it has been driven off the lot. Leasing a car allows you to avoid this depreciation.