For some people, leasing makes sense. But, for many it doesn't. If you plan to keep your car for a long time, buying is often the best choice. But if you're short on cash, or don't plan to own a car for many years, sometimes leasing is smarter.
If there's much chance that you'll damage the vehicle, you might get socked with extra charges if you lease -- after all, vehicles coming off leases are later sold. If your credit rating isn't too hot, buying might be best, as good credit is often required for leases.
Here are a few more things to keep in mind as you deliberate:
- Is the leasing deal you're being offered a good one?
- What will you be using the car for? (If it's being used for business, you may have some tax deductions coming.)
- How many miles will you be driving the car? (Excessive mileage or wear and tear can end up costing you more.)
As you compare leasing vs. buying, consider these costs and factors as they relate to each option:
- What's your initial outlay?
- How much will you be paying while you possess the vehicle?
- What final costs are there, at the end of your possession period?
- What options rights do you have, if you're leasing, and what will they cost you?
- Will you be able to deduct any of these expenses?