Why Lease a Car Vs. Purchasing It?

You've had your eye on that car for a long time. You have studied it specs, meticulously researched the pros and cons and done everything to ensure it is the right car for you. Now it's time to walk in the dealership and talk to the salesman about buying it. But he throws something at you that you didn't think of -- you have the option of buying it outright or leasing it for a few years. You're leaning towards leasing it, but don't know if it's better than buying. Take your time. The car will be there tomorrow, but this decision will impact you for years to come.

Pro: It's Only a Few Years

Even if you researched the car extensively, took it for a test drive and liked the way it looks, you may realize after a while that it just isn't the right car. Well, you won't have to hang on to the car forever. Lease terms are typically anywhere from 36 months to 60 months --- three to five years. Leasing is a viable option for those who may get bored with their cars after a few years or those who may be planning to start a family in a few years and know a two-door sports car won't suit their needs down the road.

Pro: Short-Term Price

Leasing is an excellent way to drive that car you'd never be able to buy. For a few years, you can afford to dive that high-end car only more wealthy people can usually afford. Or, maybe you just don't have the money to buy the car. The price of leasing a car for a few years can be less expensive than buying the car outright, which makes it more appealing.

Con: Long-Term price

Over the long-term, the price of leasing cars can be quite expensive. If you are constantly leasing cars, you will have paid more money than actually buying the car over, say, six or seven years, depending on the cars you are leasing. For example, a car that would cost $16,000 to buy would cost $325 per month to lease for three years. With a down payment of $2,000, you would pay $11,700. But after the term, you would have to lease another car and perhaps spend the same amount of money on the second car. So over six years, you've paid over $23,000 for a car that probably would have lasted six years and been cheaper to buy. You may also have the option to buy the car after the lease is up, but the combined costs will likely be more than if you bought the car in the first place.

Con: It's Not Yours

If you bought the car, it's yours. At the end of the leasing term, you are left with nothing. And when you own your own car, you can do what you please to it, be it bumper stickers or a new car stereo, or ignore that crack in the windshield. If you lease the car, you may be restricted from altering the vehicle. You may also owe extra money for any damage to the car, be it a dent in the door or that cracked windshield.