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Pros and cons of leasing vs. buying

Excerpted from Edmunds.com

Advantages of car leasing

Lower monthly payments

Lower down payment

You can drive a better car for less money each month

Lower repair costs (With a three-year lease, the factory warranty covers most repairs)

You can more easily drive a new car every two or three years

No trade-in hassles at the end of the lease

You pay sales tax only on the portion of the car you finance

Disadvantages of car leasing

You don’t own the car at the end of the lease

Your mileage is limited to a set amount, typically 12,000-15,000 miles a year (excess miles are paid for at the lease termination)

Lease contracts are confusing

Leasing is more expensive in the long run (as opposed to buying and driving until the wheels fall off)

Wear-and-tear charges can add up (paid at lease termination)

It’s costly to terminate a lease early if your driving needs change

Advantages of car buying

Pride of ownership — you can modify your car as you please

Car buying is more economical in the long run unless you buy and trade-in regularly

No penalty for driving excess mileage

Increased flexibility — you can easily sell the car whenever you want

Disadvantages of car buying

Higher down payment is generally required.

Higher monthly payments

You’re responsible for maintenance costs once the warranty expires

Trade-in or selling hassles when you’re ready to get rid of your car

More of your ready cash is tied up in a car, which depreciates, rather than an investment that appreciates

Source: Edmunds.com, read more at http://edmu.in/13mUfOB

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Should I lease or buy?

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