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    Lease Or Buy?

    There are a wide range of factors that determine whether leasing or buying a vehicle is the best option: down payment, credit rating, monthly payment, mileage, wear and tear, ownership versus update, and more.

    These different influences can be managed and you can come up with your best option if you consider the big picture. However, it is not a decision you should second-guess, as both leasing and buying have their upside and downside.

    Similar to getting a house, it would probably be best to buy and own, but it is not always practical, so renting makes sense in many cases. The same holds true for vehicles, whether they are compact hybrids or huge sport utility vehicles (SUVs). When you take into account your financing situation, your intended use of the vehicle, and your financial and living situations, you will know which is best.

    Whatever you do, it is a good idea to figure out your plan before you begin shopping for vehicles, and let the car dealers know what your plans are. You can keep your options open and listen to what the benefits of a lease or sale might be, but you should avoid making the decision based on that hot car you just fell in love with after the test drive.

    When Buying is Right

    Many motorists believe that buying a car is a better investment, since there is an eventual end to payments and you own the vehicle at the end. Other benefits of vehicle ownership over leasing include the ability to customize, modify, or improve the vehicle, as well as unlimited mileage and the ability to sell or trade in for another purchase.

    Although these are general rules, they are a good starting point to decide whether buying is better than leasing for your situation. Buying is generally better when:

    • You can make a substantial down payment
    • You have good credit
    • You can afford higher monthly payments
    • You plan on higher mileage
    • You plan on high wear and tear for the vehicle

    When Leasing is Right

    It can mean an ongoing car payment without ownership at the end, but leasing a vehicle can also mean an updated vehicle every few years. In addition, most leases have ownership options at some point, and in many cases, it is a good way to get a newer, reliable vehicle without a large amount down or high monthly payments.

    A lease is generally better when:

    • You cannot pay a large down payment
    • You do not have good credit
    • You want to keep your payments lower
    • You can stay within mileage limitations of the lease
    • You will thoroughly maintain the interior and exterior of your vehicle

    You're the Driver

    When considering all of the pros and cons of either a vehicle purchase or lease, make sure you maintain control of the situation, and that you are the one driving the deal. After all, you are the one who will be driving the car.

    And while some states and dealerships allow a two-week, 30-day, or other grace period during which you can return the undamaged vehicle to get out of a deal, there are still non-refundable payments and fees, and you should be confident your decision to buy or lease is the best choice for you.

    Car dealers are known for being pushy, but they do not even have to push too hard when you have the smell of a new car in your nostrils. It can be easy to get swept up in the moment and agree to a lease payment or loan terms when you are excited about a new car, truck, or SUV. It is in your best interest to resist the impulse buy, and if a dealer is making an offer that is only good for the day, you should be able to get the same or similar deal on another day, or from another dealer.

    If you're not going to buy right away, go ahead and tell the dealer you want to check the same car at a couple of other places. When the salesperson asks which dealers, you can tell them that you would prefer to just leave it at that. This is a good way to be up front with the dealer and avoid the "checking with my manager" syndrome, where a salesperson may act like they're trying as hard as possible to get your price down, but only if you can act immediately.

    If you are buying a vehicle, you may also want to consider financing separate from the dealer. The bank that has your home mortgage, checking, or other accounts may be able to give you a better interest rate on your car loan, and you can avoid the finance issues with the car salesperson and focus on driving down price.

    In terms of a lease, make sure the terms―including lump sums due, mileage limits, and maintenance requirements―are all acceptable. You can also shop around for lease rates. Use your best judgment and make the car seller earn your business with honest, up-front service.

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