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Buy vs Lease
- BUY -Â
Buying Advantages:
- You can modify your car as you please.Â
- Car buying is more economical over the long term.Â
- You can drive as much as you like. There's no excess mileage penalty.Â
- You have more flexibility since you can sell the car whenever you want.Â
Buying Disadvantages:
- It requires a higher down payment to avoid being "upside down" in the loan, meaning you owe more than the car is worth.Â
- Monthly payments are higher than lease payments.Â
- Once the warranty expires, you're responsible for repair costs.Â
- You face possible trade-in or selling hassles when you decide to get your next car.Â
- More of your ready cash is tied up in a car, which depreciates in value.Â
- LEASE -
Leasing Advantages:
- Lower monthly payments with a low - or no - down payment.Â
- You can drive a better car for less money.Â
- Lower repair costs because you are always under the vehicle's included factory warranty.Â
- You can more easily transition to a new car every two or three years.Â
- There are no trade-in hassles at the end of the lease.Â
- You pay less sales tax.Â
Leasing Disadvantages:
- You don't own the car at the end of the lease (although there is always the option to buy).Â
- Your mileage is typically limited to 12,000 miles a year (you can purchase extra).Â
- Lease contracts can be confusing and filled with unfamiliar terminology.Â
- In the long run, leasing is more expensive than buying a car and keeping it for years.Â
- Excessive wear-and-tear charges can be a nasty surprise at the end of the lease.Â
- It's costly to terminate a lease early if your driving needs change.