To Lease or To Buy, That is the QuestionIt's a matter of deciding which best fits your budget, needs, and preferences
There are so many options to pick from when looking for a new vehicle: Sedan, SUV, or truck? Two-wheel drive, four-wheel drive, or all-wheel drive? What color? What trim level?
One of the questions you might come across while vehicle shopping is whether you should lease or buy.
Leasing offers you lower monthly payments with the choice to turn a vehicle back in at the end of the lease, or to buy it out. This means you are driving a new car under warranty for the majority of your lease.
“Leasing has gotten more popular over the years,” says John Riley, sales manager at Runde Chevrolet in East Dubuque, IL. “When you lease, you have options at the end – you can buy the vehicle out, jump into another lease, or just walk away. People like to have those options and the lower monthly payments.”
Consider how many miles you typically drive each year. Leases come with a mileage cap, so they are best for people who don’t drive too many miles. The lower the mileage cap is, the lower your monthly payments will be.
Most leases are for 24, 36, or 39 months with mileage limits of 10,000, 12,000, and 15,000 miles.
“With leasing, you don’t have to worry about negative equity,” John says. “If you finance a vehicle and want to trade it in in three years and have a five-year loan, you may owe more than it’s worth. You don’t worry about that with leasing.”
Also consider how long you typically keep your vehicle. If you normally keep your vehicle more than three or four years, you may be more of a buyer. Plus, if you like to personalize your vehicle, that investment can be lost on a leased vehicle.
“Some people prefer to own their vehicles,” John says. “It’s very much personal preference. Plus, it is a little easier to trade if you are in a good equity standpoint.”