The debate of whether to lease or buy a car often comes down to personal preferences and priorities rather than purely dollars and cents. If you like to be first in line for the latest technology or if you’re prone to holding onto your favorite old t-shirt until it falls apart at the seams, leasing may be a good option for you.
However, if you want to keep a vehicle longer and build equity in it, buying is your best choice. With a car loan, each monthly payment builds equity and eventually gives you ownership of the vehicle once it’s paid off. In addition, when you choose to purchase a vehicle, it’s typically easier to trade in or sell the vehicle down the road.
Leasing, on the other hand, usually offers a higher up-front cost, lower monthly payments and no resale hassle. Plus, with most leases, you can typically opt to purchase the vehicle at a predetermined price at the end of the term. And, if you decide the car isn’t right for you after a certain period of time, many leases offer an early termination fee that allows you to return it.