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Compare Car Leasing v Buying

Buying

Leasing
Pros Pros
Insurance costs will decrease over time Down payment is low/non-existent
Builds up equity Monthly payments are lower than loan payments
Can use trade-in amount to buy a new car Easier to obtain than a loan even with bad credit rating
Ownership means monthly payments will eventually stop after the cost of the car has been paid Most warranties last 3 years (the typical length of a lease agreement)
Don't need to worry about mileage limites Maintenance costs are low
Free to modify/accessorise as you wish No depreciation concerns
  Can be claimed as tax deduction if you own a business
Cons Cons
Maintenance costs will increase over time and can include costly repair bills Insurance rates higher to cover gap insurance
Car depreciates in value quickly If your leased car indludes down payment, you will pay that expense every time you get a new lease
Monthly payments are initially higher than leasing Added fees when you exchange your old car for a new one
Down payment can be large Costs of depreciation are often factored into your monthly payments, rather than remaining with the dealer
If buying a used car from a non-reputable dealer or buying privately, there can be uncertainty about a car's history Extra fees for damage are common
  You will always have monthly repayments
  Mileage can also lead to added costs

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