Should You Buy or Lease?
With a Lease, You Can Usually...
· Drive a new car without a big down payment.
· Get a bigger, better-equipped car than you could afford to purchase.
· Enjoy a new car every few years.
· Pay for only the portion of the car's life that you use.
· Receive tax benefits if used for business (depending on the lease, and state and tax laws).
· Invest any savings in appreciating assets (such as stocks, bonds, etc.).
· Spread applicable sales tax across monthly payments (varies by state).
· Enjoy the options to buy, lease another vehicle, or explore other choices at lease end, all without having to haggle over the value of trading it in. (Note: There may be end-of-lease costs for excess mileage, wear-and-use, and early termination.)
With a Purchase, You Can Typically...
· Build equity.
· Drive as many miles as you want. (Some leases limit you to 10,000-15,000 miles per year not enough if your daily commute is more than 20 miles each way though you can buy additional miles at a discount in advance.)
· Travel with messy kids, pets, over gravel roads, and drive into ding and dent-prone parking lots without worrying about wear and use charges.
· Carry lower limits for auto insurance. See your insurer for actual quotes. (Note: While purchased vehicles typically carry lower insurance limits, some lenders automatically include "Gap protection" for leased vehicles.)
· Sell, trade, or transfer title whenever you want (subject to loan requirements).
Paying Cash vs. Financing
Some very attractive financing offers are available from time to time. You may want to consider the value of money in the bank (or investments) versus paying for a vehicle in full.