Should You Buy or Lease Your Next Car?

While most consumers pay for a vehicle with cash or finance it with a loan, another great option is to lease. Below, we’ll explore the pros and cons of buying vs. leasing to help you decide which type of purchase is best for you based on your unique needs. Make sure you do as much research as possible before reaching a decision!

Pros and cons of buying

The main perk of buying is that when the car is paid off, you own it outright. You can drive it as far as you want, make as many modifications as you desire, and even let it come to ruin if that’s what you wish!

Additionally, if you have a lot of cash in hand, you can put that toward a larger down payment to reduce your outstanding balance, thus reducing your monthly payments and interest fees. When you lease, that’s not typically an option. That said, even with more payment flexibility, buying new is still considerably more expensive than leasing in the short term.

Another advantage of ownership is that you can sell your car whenever you wish, even if you haven’t fully paid it off. Whatever you owe will simply come out of what you get from it. So if you’re not happy with your car, you’re not stuck with it.

To summarize:

• True ownership
• Flexible payment
• Sell any time
• Unlimited mileage
• Unlimited customization
• More expensive short term

Pros and cons of leasing

Leasing can help you get behind the wheel of a brand-new car at much lower monthly cost than buying new. This works because leasing is not unlike a form of renting. You get the vehicle for a set period of time, and when that time runs out, you must either return it or buy it out. There are a number of pros and cons that come with this.

The obvious pro is the cost. Monthly payments are based on the car’s estimated depreciation over the course of the lease term. For example, if you were to lease a $30,000 car expected to lose $12,000 over the first three years, you would only pay approximately $333/month before taxes and fees, as opposed to $833/month when buying new. While insurance premiums are higher on leased vehicles, it’s still not enough to overcome this major price advantage.

The main downside is that when that contract is up, you can’t just keep the car. You must return it, and you must return it in decent condition. That means minimal wear-and-tear and limited mileage — usually about 10,000-12,000 miles per year, though this is only a downside if you need to do a lot of driving.

Leases also tend to be less flexible. You can’t return the car before the lease term is up without paying a large fee. However, if you fall in love with your car, you have the option to purchase it. This can be financially advantageous if it retained more value than expected. Going back to the example above, the lease contract would have a buyout clause valued at $18,000. But if your model lost less than $12,000 of value over those three years, you could buy it out at $18,000 and then sell it yourself for more.

Alternatively, you can simply return the lease and lease another brand-new ride! If you like to experience the latest toys and features on a regular basis, leasing is a great option, although it becomes more expensive than buying new over time.

To summarize:

• Significantly lower monthly payments
• All the latest bells and whistles
• Limited mileage
• Pricier insurance
• Contract inflexibility
• Potential to buyout

Buying and leasing at Rothrock

Interested in leasing or buying? Visit our dealership in Allentown, Pennsylvania, to check out our inventory of new and used cars, as well as our available lease options. If you still haven’t decided which way to go, seeing some of our deals might help you make up your mind!