If you’re in the market for a new car you may be wondering if it’s better to lease or buy. There are pros and cons to both options and the best choice for you will depend on your individual circumstances. To help you make a decision we’ve put together a quiz to help you figure out whether leasing or buying a car is the right choice for you.
1. How long do you plan on keeping the car?
If you’re looking for a long-term investment buying a car is probably the better option. While you’ll have to make monthly payments either way with a loan you’ll eventually own the car outright. With a lease on the other hand you technically never own the car – you’re just renting it for a set period of time.
2. How much can you afford to spend each month?
Leasing generally requires lower monthly payments than buying since you’re only paying for the car’s depreciation during the term of the lease. That said you’ll still need to be able to afford the monthly payment plus any additional fees and charges.
3. Do you want the flexibility to trade in or sell the car at the end of the term?
If you’re not sure what you want in the long term leasing gives you the flexibility to trade in or sell the car at the end of the lease term. With a purchase you’ll need to sell the car yourself or trade it in for a new one.
4. Are you worried about repairs and maintenance costs?
If you’re leasing you won’t have to worry about unexpected repair bills – that’s part of the appeal of leasing. With a purchase however you’ll be responsible for all repairs and maintenance.
5. Do you have a good credit score?
Your credit score will affect your ability to lease or finance a car. In general you’ll need a good credit score to get the best terms on a lease or loan.
6. Are you looking for the lowest possible monthly payment?
If your goal is to get the lowest monthly payment possible leasing is usually the better option. With a purchase you’ll have a higher monthly payment but you’ll also eventually own the car.
7. Are you planning to use the car for business purposes?
If you’re planning to use the car for business purposes you may be able to deduct the monthly payments on your taxes. This is typically not possible with a lease.
8. Do you want the latest and greatest features?
If you’re looking for the newest model with all the latest bells and whistles leasing is a good option. Since you’ll be getting a new car every few years you’ll always have the latest features. With a purchase you’ll need to wait until you can afford to buy a new car to get the latest features.
9. How many miles do you drive each year?
If you’re someone who frequently travels or drives a lot for work you may want to consider leasing. Most leases come with an annual mileage limit and if you go over that limit you may have to pay additional fees. With a purchase there’s no mileage limit so you can drive as much as you want.
10. What’s your driving history like?
If you have a good driving record you shouldn’t have any problems leasing or financing a car. However if you have a history of accidents or traffic violations you may have difficulty getting approved for a lease.
11. Do you have a down payment?
If you’re planning to lease you’ll need to have a down payment. The amount you’ll need to put down will depend on the make and model of the car as well as the dealer’s requirements. With a purchase you may be able to get by with a smaller down payment or even no down payment at all.
12. Do you have a trade-in?
If you have a car that you’re planning to trade in you may be able to use it as a down payment towards your lease or purchase. This can help lower your monthly payments or reduce the amount of money you need to finance.
13. Do you want to customize your car?
If you’re planning to lease you’ll need to be careful about customization. Many leases forbid or restrict modifications so if you’re planning to make changes to the car buying may be a better option. With a purchase you can do whatever you want to the car without worrying about violating the terms of your lease.
14. What’s your budget?
Your budget will ultimately dictate whether you lease or buy. If you’re looking for the most affordable option leasing may be the best choice. But if you’re willing to spend a bit more each month buying could be the better option in the long run.
15. How important is owning a car to you?
If you’re someone who values ownership buying a car is probably the right choice. With a lease you never actually own the car – you’re just renting it. But if you’re not as concerned about ownership leasing can be a great way to get a new car every few years without having to worry about selling it or trading it in.
Final Thoughts
There’s no right or wrong answer when it comes to leasing or buying a car. It all depends on your individual needs and circumstances. If you’re not sure what’s best for you our quiz can help you figure out whether leasing or buying is the right choice.
Is it better to lease or buy a car?
It depends on your needs and finances.
Why would someone choose to lease a car?
Leasing a car may be a good idea if you don’t have the money to buy a car outright you don’t want to tie up your money in a car you want to drive a new car every few years or you want to avoid repairs and maintenance costs.
Are there any drawbacks to leasing a car?
Yes the monthly payments may be higher than if you were to buy the same car and you may have to pay penalties if you exceed the mileage limit or if you damage the car.
Why would someone choose to buy a car?
Buying a car may be a good idea if you have the money to pay for it outright you want to own the car outright you plan to keep the car for a long time or you don’t want to deal with mileage limits or wear-and-tear fees.
Are there any drawbacks to buying a car?
Yes you may have to pay for repairs and maintenance on the car and the car may lose value over time.
Can you negotiate the price of a leased car?
No the price of a leased car is set by the leasing company and cannot be negotiated.
Can you negotiate the price of a car you’re buying?
Yes you can negotiate the price of a car you’re buying.
How much should you put down when buying a car?
You should put down as much money as you can afford when buying a car.
How much should you put down when leasing a car?
Most leasing companies require a down payment of at least the first month’s lease payment.
Can you trade in a car when you’re buying a car?
Yes you can trade in a car when you’re buying a car.
Can you trade in a car when you’re leasing a car?
No you can’t trade in a car when you’re leasing a car.
What is a balloon payment?
A balloon payment is a large payment that is due at the end of a lease.
What is a purchase option?
A purchase option is an option to buy the car you’re leasing at the end of the lease.
What is a mileage charge?
A mileage charge is a fee charged for every mile you drive over the mileage limit in your lease.
What is a wear-and-tear fee?
A wear-and-tear fee is a fee charged for any damage to the car beyond normal wear and tear.
