Buying vs. Leasing a Car


When shopping for a car, the choice to buy or lease can be confusing. Take a look at the benefits of both options to see which is a better fit for your lifestyle—and your finances.


Buying

Full Ownership

Once your loans are paid off, the car belongs to you with no strings attached. If you lease, you will have to go through a buying or leasing process once your term ends in a couple of years.

Negotiate Down Payment

Purchasing a car allows far more flexibility in down payments than leasing. You are able to put down what you can afford and borrow the remainder.

No Restrictions

When leasing, there are set mileage and maintenance restrictions that you cannot exceed without paying a penalty. If you buy a car, there are no dealer restrictions on how you use it.

Freedom to Sell and Trade

Once you own a car, you can sell or trade your vehicle at any time without penalty.

Modifications

You can make modifications to your car either as needed or as desired. You cannot make changes to the car if leasing.

Leasing

Lower Monthly Payments

Lease payments are typically lower than payments towards a car loan. This could help if you have a tight cash flow.

Under Warranty

Since leasing only lasts a few years, expensive repair costs will most likely be covered under warranty for the duration of the lease.

Stay Current

By having a lease that only runs a few years, you can consistently have the latest in technology, safety and security features.

Tax Flexibility

You only have to pay taxes on monthly lease payments. If you were to buy a car, you would have to pay the sales tax within 30 days of the purchase

No Depreciation

Leasing a car means that when the contract is up, you are not stuck with a car that has depreciated over the years you’ve driven it.

This article was written by Advicent Solutions, an entity unrelated to Busine LLC. The information contained in this article is not intended to be tax, investment, or legal advice, and it may not be relied on for the purpose of avoiding any tax penalties. Busine LLC does not provide tax or legal advice. You are encouraged to consult with your tax advisor or attorney regarding specific tax issues. © 2016 Advicent Solutions. All rights reserved.