Is Buying a Car Better Than Leasing One?

Choosing between buying or leasing a car is one of the classic dilemmas that car shoppers are faced with. In some cases, you would be better off to buy rather than lease. In other situations, the opposite is true. When making the decision, you must look at your driving needs as well as your long term goals.

Driving Habits

When making your decision, you have to look at what you plan on doing with the vehicle. If you are the type of person who will drive many miles every year, it typically makes sense to buy. When you lease a car, you only have a certain number of miles that you can drive. If you go over that, the overage charges can be significant. If you only drive a few miles to work every day, a lease might make more sense.

Long Term Goals

Look at what you want to accomplish over the long-term when making this decision. If you would like to be able to get away from a car payment, buying is definitely better than leasing. After the four or five years of loan payments are done, you no longer have to make a payment. At that point, you could start saving for the purchase of your next car. If you do not mind a car payment and have accepted it as a way of life, the lease could be the way to go.

Hands Off

If you are the type of person who does not like to worry about maintenance or repairs, buying a car might not be the best option for you. While you should be covered by a factory warranty for major issues when you buy, your warranty will eventually run out. At that point, you will have to handle repairs and any major issues that come up. When you lease a car, you can simply take it into the dealership for anything that presents itself.

Interest Rate

Not every part of this decision is a factor that directly relates to your situation. Some outside factors should also play a role in your decision. Buying is usually better than leasing when you can get a very low interest rate. For example, if you have good credit and you can take advantage of a zero percent interest rate, it makes sense to buy. The lease payments would not be much lower than your loan payment. If interest rates in the market are much higher, lease payments will be lower. At that point, it becomes more tempting to get a lease.