Disadvantages of Car Leasing
- You don't own the car at the end of the lease.
- Your mileage is limited to a set amount, typically 12,000-15,000 miles a year (excess miles are paid for at the lease termination).
- Lease contracts are confusing.
- Leasing is more expensive in the long run (as opposed to buying and driving until the wheels fall off).
- Wear-and-tear charges can add up (paid at lease termination).
- It's costly to terminate a lease early if your driving needs change.
Advantages of Car Buying
- Pride of ownership — you can modify your car as you please.
- Car buying is more economical in the long run unless you buy and trade-in regularly.
- No penalty for driving excess mileage
- Increased flexibility — you can easily sell the car whenever you want.
Disadvantages of Car Buying
- Higher down payment is generally required.
- Higher monthly payments
- You're responsible for maintenance costs once the warranty expires.
- Trade-in or selling hassles when you're ready to get rid of your car
- More of your ready cash is tied up in a car, which depreciates, rather than an investment that appreciates.
Look to Edmunds.com for more valuable information and analysis!