Buying Vs Leasing
OWNERSHIP
Leasing: You do not own the vehicle. You get to use it for your desired number of miles, but must return it at the end of the lease unless you choose to buy it then.
Buying: You own the vehicle, and get to keep it at the end of the financing term.
Up-front costs
Leasing: The only required upfront cost is first month’s payment.
Buying: No required up front cost.
Monthly Payments
Leasing: Lease payments are usually always lower than loan payments because you are paying only for the vehicle’s depreciation.
Buying: Monthly loan payments are usually higher because you are paying for the entire purchase price of the vehicle.
Early Termination
Leasing: Lease payments are usually always lower than loan payments because you are paying only for the vehicle’s depreciation.
Buying: Monthly loan payments are usually higher because you are paying for the entire purchase price of the vehicle.
Vehicle Return
Leasing: You may return the vehicle at lease end and “walk away”.
Buying: You may have to sell or trade the vehicle when you decide you want a different vehicle.
Future Value
Leasing: You have no risk of the future value of your vehicle.
Buying: You have the risk of the vehicle’s market value when you decide to trade or sell it.
Mileage
Leasing: Leases limit the number of miles you drive. You can negotiate a higher mileage limit for a slightly higher monthly payment. However, you do pay a fee for going over your miles.
Buying: You can drive as many miles as you want. However, the higher miles you drive will lower the vehicle’s resale value.
Excessive Wear
Leasing: There is a limit to the wear your vehicle can have. You will likely pay extra charges for exceeding those limits when returning your car.
Buying: There is no limit to the wear of your vehicle. However, again this will affect the resale value of your vehicle.
End of Term
Leasing: (Usually 2-4 years) You can either decide to lease another vehicle, or finance the purchase your current vehicle.
Buying: (Usually 4-6 years) At the end of your loan term, you have no further payments.
