Should I Lease or Buy My Auto?
This calculator helps you decide whether to lease or buy your automobile.
When you set out to acquire an automobile, you are faced with the “lease vs. buy” decision. This is one of those classic decisions for which there is no absolute “right” answer. The best decision really depends on the specific needs and desires of you, the acquirer. How much mileage do you typically put on your car over a year? How long do you normally keep cars that you purchase? The answers to questions like these will greatly influence which decision is the right one for YOU.
To make the decision even more complex, there are both financial and qualitative factors that come into play. For example, how important is it to be driving a (relatively) new automobile, with the latest features and styling?
In general, leasing may a good option for people that don’t put a lot of mileage on their cars. When you lease, you have a mileage limit, and, if you go beyond this, you pay a additional cost for each mile that exceeds this. Leasing may also be a good option for those that prefer to be driving the “latest and greatest” automobile models. At the end of the lease term, you can return your car and lease (or purchase) another new model. This not only enables you to drive a new car with updated features and styling, it also limits many of the maintenance costs you would be subjected to by driving and maintaining an older vehicle.
Purchasing, on the other hand, may be better for those folks that do put a lot of miles on their car (via a long commute, for example), since there are no mileage limits and penalties like those associated with a leased automobile. The insurance rates on purchased cars are also lower than those on leased vehicles. In addition, if you purchase a car, you still have some residual value in that car once you go to sell it, and this may be a financially positive transaction for you (but this is dependent on many factors). Finally, some people like the sense of ownership that comes along with purchase an automobile.
The Auto Lease vs. Buy Calculator below can help provide some valuable guidance in this common decision. While this will provide some general direction, it is always wise to seek advice from a professional financial advisor to make a final decision as to which is the best option for you.