Your Next Car: Buy or Lease?

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Real Estate

Your Next Car: Buy or Lease?

Tax time is the time to look at your next car purchase and think about what you want to drive.  There are good reasons to own and good reasons to lease.  Talk to your tax professional and make the choice that is right for you, but here are some pros and cons for making the choice.  Happy travels!

Pros of leasing:

l Small or no down payment

l Lower monthly payments (even compared to 0 percent loan)

l A warranty for the life of the lease

l Driving more car than you could afford to buy

l Brand-new car every 2-5 years

l You pay for only a portion of the vehicle's cost

Cons of leasing:

l Limited mileage

l You’ll never actually own the car

l Permanent monthly payment

l Penalties for turning the car in early, undue wear and tear, going over the pre-specified mileage limit

Pros of buying:

l One day, it’ll be yours, all yours

l No limit to mileage

l End to payments

l Lower auto insurance cost

Cons of buying:

l Long-term cost of buying a car is less than leasing

l Less complicated than leasing

l A portion of every payment you make is lost to depreciation

l Good-sized down payment

l You pay for the entire cost of a vehicle, regardless of how many miles you drive