Is it Better to Buy or Lease a Car?

buy or lease a car

You need a new car, and you’re wondering what your options are. You know you can choose to lease a car or buy one, but how do you know which is best for you?

Don’t worry – you’re not alone.

In this blog, we’ll take a look at leasing a car vs. buying one and which is a smarter choice from a maintenance and investment perspective.

Let’s dive in. 

How Does Leasing a Car Work?

Leasing a car is essentially a long-term rental. You’ll make upfront and ongoing monthly payments in most lease agreements. 

In return for your payments, you’ll get to use the car for several years. You’ll return the car at the end of your contractual lease period and then decide if you want to start a new lease or purchase a vehicle.

At first glance, leasing can seem more appealing than buying a car. The monthly lease payments are usually lower than purchasing a vehicle since you’re not paying back a principal balance. 

Here are a few additional advantages of leasing:

  • You’ll get a new or nearly-new car that’s unlikely to require extensive maintenance.
  • People who lease cars get to drive late-model vehicles typically covered by a new-car warranty from the manufacturer. 
  • Some lease agreements include scheduled maintenance, like free oil changes and tire alignments. 
  • A lease agreement may allow you to drive a higher-priced, better-quality vehicle than you’d be able to purchase.
  • You won’t have to worry about the car losing value or deal with the complexities of selling it. When your lease ends, you just return the car!
  • Business owners may get tax advantages from a car lease.

While leasing a car has many benefits, it’s not a perfect system. All told, leasing a car usually costs more than taking out an equivalent loan since you’re paying for the vehicle while it is actively depreciating. Additionally, long-term lease agreements mean you’ll always be paying lease fees. 

By contrast, you’ll likely enjoy years of payment-free driving if you purchase a vehicle and pay the loan off. Additionally, you may have to pay wear-and-tear charges if you don’t maintain the car in good condition. 

How Does Buying a Car Work?

Buying a vehicle with a car loan is a pretty straightforward process: you borrow money from a lending institution, purchase the vehicle, and make monthly payments for a set period (usually several years). 

Each payment you make is divided between the outstanding principal of the loan and the accumulating interest. Once you pay off the loan, you own the car outright and only need to pay for ongoing maintenance, like oil changes, brakes, and more. 

Here are a few benefits of buying a car:

  • You don’t have to worry about additional charges or mileage restrictions, which are common with lease agreements.
  • You’ll have complete control over the car and can sell or trade it anytime.
  • Your payments will stop once you pay off your loan, which frees up extra money. 

The Verdict: Buying is Usually a Better Option

For some people, leasing can be a good option. If you want to get into a luxurious new car without a substantial financial commitment, the choice to lease a car can help you do that. Additionally, it’s a good option for people who only need the use of a car for a few years.

In most cases, though, buying a car is a better investment. While the monthly payments may be slightly higher, you’re investing in a vehicle you can sell or trade at any time. And as long as you build a relationship with a local mechanic for routine maintenance, like an oil change or brakes service, your investment will keep running for years to come. 

Looking for a Pensacola team to help you maintain your vehicle? Look no further than DeBroux Automotive. Contact us today to learn more about our team or services.