Getting Some Wheels: Lease or Buy

For the individual in need of a car, there is the common dilemma of whether to buy or to lease. And while there is no right or wrong answer, it is very clear that the advantages of car leases offer many strong incentives to select that as an option.

A common misconception is that the decision whether to lease or buy is solely financial. This could not be farther from the truth. While the amount of money you're willing to spend clearly will affect your decision, your own personal priorities and what is important to you should play a much bigger role.

Some questions to ponder: What's more important, having a new vehicle every couple of years or long-term cost? Is having ownership a priority? It's important to figure out what is important to you before moving forward with this major transaction.

Typically, the most commonly referred to reason for leasing a car is vehicle deprecation. Why own an item that will be worth significantly less simply because it's been driven off the lot? And once a lease ends, you have the option of being done with the vehicle forever, at no cost to you, rather than dealing with moving an old, used car. Trade-in is an often underestimated hassle, and cars leasing will avoid that.

Another often-referred to advantage is not having to worry about car repairs. The manufacturer picks up the tabs, allowing you to bring the vehicle into the dealership more often, knowing you won't have to spend a dime. Hear a weird clicking sound from the engine? A car owner might try to ignore it, rationalizing this with the idea that the car drives fine. But hey, if you can get it fixed for free, why wouldn't you?

However, it's important to acknowledge how complicated leasing a car is. With residuals, money factors, etc., car leases make a simple loan appear simple

Many car-users lease vehicles with the intention of buying it at the end of the least, or before it expires. It is extraordinarily rare that this is a less expensive option, and you'd probably benefit, at least from a financial standpoint, of simply buying the car outright.

However, the biggest advantage to leasing is the retention of your own flexibility. In other words, you hold all the cards. All the options are yours. Car leasing deals allow you to buy, trade, sell, or just walk away from your vehicle the second the lease concludes…. and often, even before that.

At the end of the day, that flexibility may be the difference in deciding whether you should be buying or leasing a car.