Lease or Buy? 4 Questions to Help You Figure it Out

The decision to buy or lease a car is something anyone in the market for a new vehicle will have to tackle. Each method comes with its own pros and cons. When it comes to leasing, you’ll typically enjoy having lower monthly payments. This makes leasing a great way to go for someone on a tight budget. You’ll also free yourself of the trouble of selling your vehicle when you no longer need it, and you’ll regularly get to drive a new car.

Buying comes with its own set of benefits. Purchasing your car gives you more flexibility when it comes to mileage. Buying is also a good option for someone who seeks stability. If you want to drive the same vehicle for more than five years, buying is generally the best way to go. You’ll keep your memories of long drives, family vacations, and road trips with you, and you’ll get to customize your car to fit you too. So to buy or to lease? Here are a few questions to help you decide.

1. How Many Miles Do You Drive in a Year?

Take a moment to consider if you drive an average amount of miles in a given year, or if your mileage is very unpredictable. Buying your car or truck offers more flexibility when it comes to the mileage you can put on the vehicle. Still, this is most important for people who have a longer commute. Conventional leases can accommodate 10,000 to 15,000 miles, so if you typically fit in this range, you may find that a lease suits your needs.

2. Do You Want to Drive a New Car Every Few Years?

Some people value the prestige of having the latest model every few years, while others enjoy driving one vehicle for a long time and keeping the memories that go along with it. Think about which is more important to you.

A lease will let you upgrade to a new car every few years, plus you won’t risk having to make any major repairs. However, you won’t come out owning anything on the other end. Buying a car, however, makes you responsible for all maintenance repairs after the warranty, but you also get to keep your car.

3. How Stable is Your Lifestyle?

Assessing your stability will help you decide either way. Is your lifestyle stable enough that you won’t want to end your lease early, or are you likely to want out? Additionally, how stable is your financial situation? Opting for a lease will give you lower monthly payments, but it may also lead to higher long-term costs. Determine what you can afford.

4. Do You Want to Build Ownership Value?

Connected to this is assessing what you value more: building ownership value or benefiting from lower (often much lower) monthly payments. By paying off your vehicle when you buy, you’ll build ownership value. The trade-off is higher monthly payments.

Finding the answers to these questions will help you decide if a purchase or lease agreement is best for your next car.

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