It’s part of our car buyer’s glossary. The series breaks down all the terms you need to know when buying a new or used car from the dealership.

One of the biggest questions car buyers consider is, should I lease or buy? Here are some tips to help you figure out what works for you.

lease

Renting a car is a lot like renting an apartment. You sign a contract, pay a fixed price, cover a fixed mileage, for a fixed period of time. Your monthly lease payment depends on several factors, including the price of the vehicle and the amount of your down payment. Generally speaking, all other things being equal, a monthly lease is cheaper than a purchase. You can also consider a one-time lease. Paying for the entire lease in one go can save you a lot of money, but you’ll need to have cash on hand. It’s not for everyone. Leasing is cheaper because you don’t keep any equity. For better or worse, once the lease expires, you just pay for any damage or excess mileage and return the vehicle, unless you buy it out.

Buy

By contrast, financing the purchase of a car results in higher monthly loan payments than leasing, but you end up owning the car outright. You can only lease at a dealership, but you can get a car loan at your local bank or credit union, often getting a better deal. Know your credit score, store loan rates, and get pre-approved before heading to the dealership. Check out the Autoblog Loan Calculator to explore your loan payment options.

so what should I do?

Both options have pros and cons, so here are some tips to help you decide.

Leasing Specialist
Leasing may be a good option if…

  • You don’t want to put down a lot of money
  • You often want a new car
  • you can accept car payment
  • You drive less than 15,000 miles per year
  • You generally keep your car in good, undamaged condition
  • You are eligible to cancel the lease

Buy Expert
Financing the purchase of a car can be a good option if…

  • You can afford higher monthly payments
  • you drive a lot
  • You don’t need to buy new cars often
  • Your car tends to get some scratches and scratches
  • You want to stop paying at some point

Armed with these tips, you should have a better idea of ​​whether leasing or buying is right for you. Visit Autoblog.com for more information.