By: Julia Bellotti
As I walk through two car dealerships to and from work every day, the question of buying vs. leasing a car is constantly on my mind. I’ve always wondered if leasing is a good idea - it seems relatively inexpensive and I’d then have a car, which would definitely make some of my daily life easier, but is it worth it?
About five minutes into my research for this article I realized that the answer, at least for me, was no. Unless I were going to use the car for work (as a courier, an Uber driver, etc.) to get tax benefits, or I simply didn’t mind throwing away money to have a brand new car every three years, leasing was not going to be the option for me. Money Under 30 aptly states that “financially, the best way to buy a car is to pay cash for something pre-owned to avoid paying both interest and off-the-lot depreciation.” Many people are not in that position, and that’s why they then have to decide between a car loan and leasing. When considering the long-term benefits for the average person, however, buying a car is the way to go.
Let’s start with the positives of leasing a car:
Unfortunately, the list of negatives is a little longer:
The bottom line is this: Even though the monthly payments when buying a car are higher than leasing, you’ll likely be financially better off after the car loan ends and you’ll have greater freedom over your driving habits. Leasing a car may only be in your best interest if you don't often drive (keeping the car mileage/average wear and tear low), or drive for your career (allowing you the extra tax benefits).