Choosing your dream car isn’t hard enough — all you have to do is choose the body type — sedan, SUV or pickup truck — and pick a color and interior. But when it comes to figuring out how to pay for the ability to operate the car, the task becomes more complicated. You’ll have to weigh a lot of factors to figure out what’s best for your budget and lifestyle.
Both leasing and buying a car have their pros and cons. By using the evaluation tool on lease-vs-buy.com, you’ll get a personalized recommendation based on your answers and preferences.
Let’s take a look at the important points you should weigh. This will help you make an informed decision.
When you buy a car, it becomes completely yours as soon as you close the loan. With leasing, you don’t own the car, you pay monthly payments for the opportunity to use it. At the end of the lease term, you simply return the car.
Leasing is essentially long-term renting. Some lease contracts do allow you to buy the car at the end of the term, but keep in mind: in the vast majority of cases (about 99%), the total amount you’ll spend will be higher than if you had financed the purchase upfront. And that’s just one of the key differences.
Below highlight the main pros and cons of both options. We’ll also cover five important questions that can help you decide whether leasing or buying is the better fit for you.
Pros and Cons of Leasing a Car
Pros
- You have the option to drive a new car every few years and enjoy the latest features like Apple CarPlay, blind spot monitoring, collision warnings, and even Level 2 autonomous driving.
- You won’t have to worry about selling your car later — return it to the dealer at the end of your lease.
- Low maintenance costs. You’re responsible only for routine servicing. Major repairs are typically covered under the manufacturer’s warranty, and many brands include scheduled maintenance for the duration of the lease.
- Lower monthly payments — you’re only paying for depreciation over the lease term, not the car’s full market value.
Cons
- You don’t own the vehicle — the leasing company does.
- Over time, leasing can cost more than buying, especially if you buy out the vehicle at the end.
- There are usage restrictions: you can’t make custom modifications, and mileage is limited (extra miles cost 15–30 cents each). Early termination fees can be expensive.
- You must be extremely careful — excess wear and tear (like large scratches, dents, worn tires, or cracked glass) may result in extra charges.
Pros and Cons of Buying a Car
Pros
- No usage restrictions. You can drive as much as you want, customize the vehicle, and not stress about spills or scratches.
- Full ownership. Once you pay off the loan, the car is yours to do with as you please.
- Lower costs over time. Buying (especially through financing) is typically more cost-effective in the long run. After you pay off the car, you can keep driving it for years — which makes the monthly cost of ownership much lower than leasing.
Cons
- You won’t always have the latest tech. Car technology evolves quickly, so a vehicle owned for more than 2–3 years can feel outdated.
- Depreciation. A new car can lose up to 20% of its value in the first year and another 10-15% each subsequent year. By the time you pay off the loan, the car will be worth much less than you paid for it.
- Higher maintenance costs over time. After the warranty expires (typically after three years), you’re on the hook for all repairs and upkeep.
Questions to help you decide whether to lease or buy a car
To make the right choice, consider the following steps:
- Think about your preferences.
- Weigh the pros and cons.
- Evaluate potential risks.
- Plan your finances.
Ask yourself these five key questions to figure out which option makes more sense for you:
- How many miles do you drive per year?
If you take frequent long trips, owning may be cheaper due to mileage limits on leases. - Do you like to change vehicles frequently?
If your job or lifestyle requires regular upgrades or you like having the latest features, leasing may be the perfect option for you.
- Will you have pets or kids in the car?
Passengers and pets can accelerate interior wear — which could mean extra charges when returning a leased car. - Can you handle unexpected repair costs?
New cars typically only require routine maintenance, but after the warranty expires, unexpected repairs can increase. - Do you want to customize your car?
Leasing limits most modifications and may charge you extra for unauthorized changes.
Take a quick quiz at lease-vs-buy.com, and get a personalized recommendation. It takes into account your love of technology, cleanliness, driving style and financial situation to help you make the smartest choice.
