Buying vs. Leasing

People don’t realize that leasing invariably costs more than an equivalent loan. And even if they did, the extra cost is difficult to calculate. Still, many people can’t afford the higher payments of a loan, at least not without putting a substantial amount down. If payments are an issue, consider buying a lower-cost vehicle or a reliable used car.

Leasing is a very good way for dealers to keep customers around and it's a great option for customers who are looking for some flexibility. Sellers will talk you into leasing by showing you the small month to month payments. Dealers want you to lease, they want you to come back, finance or lease an another car, or perhaps buy the car when your lease is up.

Buying:	Leasing:
1. You can keep the car as long as you want, you are the owner of the vehicle;	1. You don't own the vehicle. You must return it at the end of the lease unless you decide to buy it;
2. You can sell or trade in your vehicle at any time. If necessary, money from the sale can be used to pay off any loan balance;	2. If you end the lease early, early-termination charges can be almost as costly as sticking with the contract;
3. You're free to drive as many miles as you want;	3. You may only drive 10 to 15k miles per year, if you drive more than agreed you will pay a fee or you can buy miles in advance for .16-.26 cents per mile; There's no credit if you drive less than the miles allowed;
4. You can customize your vehicle as you like;	4. You cannot customize the car; Or you can but you will have to take off all aftermarket parts when you return the car;
5. You don't have to worry about wear and tear;	5. You are responsible for wear and tear or you will end up paying for dings, scratches or even wear of tires. You will be charged a fee for all dings, scratches, dents, worn tires and others;
6. The vehicle will depreciate but its cash value is yours to use as you like;	6. On the plus side, its future value doesn't affect you financially. On the negative side, you don't have any equity in the vehicle.