Should You Buy or Lease a New Car?
When it comes to getting a new car, should you buy or lease? There are pros and cons either way, so how about if you click here and let us (and Bob Barker, from "The Price Is Right") help you out? Tweet
In case you hadn’t heard, the average price for a new vehicle has now passed $40,000. That’s more than your old man’s third divorce settlement.
From a personal-finance perspective, it would a lot smarter (and a lot more exciting) to go on The Price Is Right and win one instead of buying or leasing one yourself:
But hey, if you want some new wheels and can’t get yourself to a Hollywood TV studio, then buying or leasing are probably your only other options.
So which should it be: buy or lease? It’s a big question, like the difference between a date and a marriage.
Here’s how we’re going to answer that:
Cars: which should it be— buy or lease?
It depends.
It depends on you. And your priorities. And your finances. And your budget. And a bunch of other stuff about you we don’t know (and you may not know about yourself yet, either).
So we can’t tell you the right answer for you, but we can help you figure it out for yourself.
Using info we gathered from Edmunds and Consumer Reports and MoneyUnder30, here’s a checklist that will help you figure out if you should lease or buy:
1. If you’re the kind of guy who wants to buy a new car, and then drive it into the ground before you get another one:
–When you buy, you may be able to get 0% financing and once you pay off the loan, the car is yours. You own an asset you can sell. Or you could keep it for many years and never have a car payment in all that time. (But on the other hand, you could also find yourself staring at a 6- or 8-year loan to make your payments more affordable. That’s a loooong time.)
2. If you’re the kind of guy who wants to buy a new car, and you want to spend as little as possible right now:
–With a lease, you’ll typically have a lower monthly payment with a low or no down payment. That means you can get more car for less money than buying.
3. If you’re the kind of guy who wants to buy a new car, and when it comes to money the bottom-line is what’s most important to you:
–You most likely will spend less in the long run if you buy. But “most likely” means we can’t account for, say, a $4,500 transmission repair in your SUV the day after after the warranty expires.
4. If you’re the kind of guy who wants to buy a new car, and you always like to feel like you got to get the best damn deal possible:
–With a lease, you’ll typically have a lower monthly payment with a low or no down payment. That means you can get more car for less money than buying.
5. If you’re the kind of guy who wants to buy a new car, but you hate surprises…especially when it comes to surprises like expensive repairs:
–With a lease, repairs are generally covered because the vehicle is under warranty. This can also be true of owning a car, but eventually you’ll be on the hook for all repairs when the vehicle warranty expires. The older a car gets, the more expensive repairs can be (hello stupid timing belt).
6. If you’re the kind of guy who wants to buy a new car, and you aren’t going to let anybody like a bank or leasing company tell you what you can and cannot do and you sure as hell don’t want anyone keeping track of how many miles you drive:
–When you buy, you can drive to your heart’s content and do anything to the car you want (racing stripes!). A lease has a mileage cap that can cost you $0.20 a mile or more if you go over (or you’re basically paying for miles you don’t use in your monthly payments if you’re under), and you need to take good care of the car so you’re not penalized when you turn it in.
7. If you’re the kind of guy who wants to buy a new car, because you want a new car; if you could, you’d get a new car every day:
–With a lease, you can buy the car at the end of the lease. Or just get another lease and keep the new car smell in your nose. But those monthly payments go on forever.
8. If you’re the kind of guy who wants to buy a new car, but what if you decide you don’t like it in a few months or a year?
–You’ve been warned: It’s really expensive to get out of a lease.
9. If you’re the kind of guy who wants to buy a new car, or really you’d like to have a lot of new cars:
10. If you’re the kind of guy who wants to buy a new car, because you just love that new car smell:
The cheapest option: An air freshener.
