To Buy or Lease Your Car…That is the Question

July 14, 2015

buy or lease a car

image courtesy of Suphakit73 at

We were speaking with a friend the other day who is tired of the constant repairs he’s having to make to his 2006 vehicle. It’s one thing, then the other…steering mechanism and fluid replaced, struts, breaks, tires that can’t hold air…on and on.

Then looking at the ads in the Utica Observer Dispatch, he noticed the deals available to lease a car. He’s one of those who “keeps it till the wheels fall off” types who holds on to his cars till they literally get holes in the floor.

Never thought about leasing a car. But wait a minute…is it a better deal to get a new car with full warranty for less worry about repairs? And then, wouldn’t it be nice to give them back the car after two years and just pick up another new one?

What are the advantages and disadvantages in leasing a car as opposed to owning one?

Let’s take a look…

Advantages to Leasing a Car

The advantages of leasing are that you can get a new car for less out of pocket expense per month than buying a new car. There’s usually a low down payment required, or none at all.

For this reason, you can drive a better equipped car than you could normally afford. And you’re always driving late models covered by manufacturer’s warranty. This means your repairs are fewer because the car is newer. That’s a big advantage for our friend who has had it with the constant repairs on his old vehicle.

One of the biggest reasons people lease is because they really want to be in a new car every few years, before their current one starts to get old, wear down, and become a junker…they love that new car smell.

Best of all, at the end of the lease, you can just drop the car off at the dealership and either rent another one or walk away.

Disadvantages to Leasing a Car

The disadvantage to a lease is that over time, the costs are more because of higher finance charges. If you own your car and pay it off, there are obviously no more payments. But with a lease, you are always maintaining the monthly payments as your lease runs out.

Also, if you drive more than the allotted miles in the lease contract, you pay more. If you don’t use up all the miles, you don’t get a credit. The limit is usually between 12,000 and 15,000 miles per year. So you must be sure to stay within the mileage limit of your lease agreement.

You must be sure to keep the vehicle in good condition or pay for the excess wear and tear. So if you have kids that might do a number on the interior, leasing may not be a good idea.

Of course, with a lease, you get no equity in the car at all. You can’t trade it in or sell it when you’re ready for your next car.

It seems to us that after looking at the pros and cons, one of the main reasons people might lease their vehicle rather than own it is that they like new. They can get more car for their monthly payment and don’t have to hassle with the constant maintenance and repair required of an older vehicle.

We asked our friend after looking at this report what he thought…he’s decided that the cost to lease is too much. For now, he’ll put up with the lower overall costs of repairs rather than enjoy a new car.

What do you think?

Until next time,
Your SZW Team

Scalzo, Zogby & Wittig, Inc. is your New Hartford area independent insurance agent. Call us for a quote on insurance for your home, car, business, or life at 315.792.0000.