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You're in need of a new car, but does buying or leasing make the most financial sense? Many go into the purchase thinking that if they don’t have the finances, car leasing may be a better fit. Leasing may also be a good option for those who are looking to drive the latest car models, but don’t want to own their car. However, taking out an auto loan to buy a new or used car can help you save a lot of money in the long run compared to leasing a car. Another thing to consider is that if you buy a car, once you make your final loan payment, you will fully own your vehicle, while at the end of the lease, you will have to return your car.
Keep in mind that although monthly payments and interest rates will likely be higher when you purchase a new car, you have the ability to sell, donate or gift your vehicle in the future because you own it. Leasing, on the other hand, can mean lower monthly payments and interest rates. However, you won’t be investing your money on an owned vehicle.
Should you buy or lease a car?
- The loan term/lease term in months
- Purchase price
- Down payment
- Interest rate
- Sales tax rate
- Annual depreciation
Get the net cost of buying vs. leasing by simply entering the fields below.
Insurance terms, definitions and explanations are intended for informational purposes only and do not in any way replace or modify the definitions and information contained in individual insurance contracts, policies or declaration pages, which are controlling. Such terms and availability may vary by state and exclusions may apply.