Buy vs Lease

When considering a new vehicle, the amount of options available can be overwhelming. Makes, models, colors, interiors, trim packages… this list goes on! Among the most important choices you have to make is how to pay for the vehicle. Should you lease or should you buy? We'll tell you the difference between buying and leasing and break down the advantages and disadvantages of each to help make this decision as easy as possible.


If you lease a car, you only pay a portion of the vehicle's total value. You don't necessarily have to make a down payment like you may have to do when buying a new vehicle, however some fees and possibly a security deposit may be required. You have a monthly payment, similar to a regular car loan payment. However, you must either return the vehicle or finance an entire purchase of the vehicle at the end of the leasing period. There are yearly limits on mileage and wear and tear.

Advantages of Leasing

  • Much lower monthly payments
  • Lower down payment, if there is a down payment at all
  • No concerns over depreciation of value
  • Low credit is less of a concern
  • Can be claimed as a tax deduction if the vehicle is used for business purposes
  • You can easily drive a new car every two or three years
  • No trade-in hassle at the end of the lease
  • You only pay sales tax on the portion of the car you finance
  • The car is usually covered under warranty for the entire length of the lease

Disadvantages of Leasing

  • Higher insurance premiums
  • Limits on mileage, and penalties if you exceed them
  • Penalties for excessive wear and tear
  • You don't own the car at the end of the lease
  • Early lease termination is costly and can damage your credit
  • Always dealing with a monthly payment
  • You are not free to customize your vehicle


If you buy a car, you pay the entirety of your vehicle's total value. Financing a car loan through a bank or the manufacturer spreads the cost over a specified monthly period. These monthly payments are higher than the monthly payment for a lease on the same car. At the end of this period, the vehicle is yours to keep, sell or trade.

Advantages of Buying

  • Eventual ownership, at which point you don't have to make payments on the vehicle
  • You are free to sell or trade your vehicle at any time, depending on your equity
  • No mileage limits
  • No worry over wear and tear except for personal preference and eventual trade-in value
  • You are free to modify, accessorize or otherwise customize your vehicle
  • Lower insurance premiums
  • Pride of ownership
  • More economical in the long run if you plan to keep your vehicle for a long period of time
  • Increased flexibility
  • Cash value is yours to do with as you like
  • Building equity to help pay for your next vehicle

Disadvantages of Buying

  • Higher monthly loan payments
  • Larger down payment
  • Depreciation of your vehicle
  • You are responsible for maintenance costs once the warranty expires
  • Trade-in or selling hassles
Please speak with our trade advisor for more information.