What Is Best: Lease vs. Buy a Car?

Should you lease or buy a new car? With rising car prices in Olympia and beyond, this is a valid question. This guide explores whether it’s better to buy vs. lease a car so that you can make the best decision for your situation.

The Essentials of Leasing a Car

When you lease a car, you’re essentially renting it. Leases for a new car are typically two to four years, and you pay each month for the right to drive it. You don’t own the car, so you’ll need to return it to the dealership at the end of the lease. However, you can usually swap it out for a newer Hyundai model without any difficulties.

Leases usually have lower monthly payments than financing for buying a car and may include a mileage limit. The good part is that leased cars are usually covered under warranty, so you won’t be left with many out-of-pocket expenses.

The Essentials of Buying a Car

Buying a car means you purchase it outright by paying cash or financing it through a loan. Most financing terms last 36 to 72 months, and after this period, you’ll own the car for as long as you’d like.

Monthly payments for financing are usually more expensive than leasing. However, each monthly payment helps you build equity in the car. You aren’t restricted by mileage either, and you can customize the car since it’s yours.

Pros and Cons of Leasing

Some of the benefits of leasing include the following:

• Lower monthly payments (typically $200-$500, depending on the car)
• Lower up-front costs (down payments are often $0-$3,000)
• Access to newer models with the latest technology
• Warranty coverage and predictable maintenance costs
• Easy return process at the end of the lease
• Potential tax advantages if you’re using the car for business

Some potential disadvantages of leasing a car may include these points:

• Mileage restrictions (often 10,000-15,000 miles a year) with fees if you go over this
• You don’t own or build equity in the vehicle
• Continuous payments if you continue leasing
• Fees for excessive wear and early termination
• You can’t customize or make any changes to the car

Keep in mind, you may need to pay additional fees at the end of the lease for excess mileage and potential penalties for wear and tear. These costs typically range $300 to $400. If you want to get out of your lease before the end of the contract, you’ll also face expensive early termination fees.

Pros and Cons of Buying

The benefits of buying include these factors:

• Full ownership and equity after you pay off the loan
• No mileage restrictions, which is ideal if you often drive long distances
• Freedom to customize or modify your vehicle
• Potential for lower long-term costs after you’ve paid off the loan
• You can decide to keep, sell, or trade in the vehicle later on

Potential drawbacks of buying a car may include the following:

• Higher monthly payments (often $400-$700, depending on the car)
• Larger down payment (usually 10%-20% of the purchase price)
• You’re responsible for repairs and maintenance after the warranty expires
• New cars lose most of their value in the first few years

Compared to leasing, buying a car is generally more expensive in the short term but less expensive in the long run. Once you’ve paid off the loan, you’ll own the car. Leasing can be cheaper on a month-to-month basis. But you’ll have ongoing payments with no benefit of ownership.

Other Factors To Consider When Comparing Leasing and Buying

Keep in mind these items when deciding between leasing or buying a car:

• Warranty and maintenance preferences: Leased vehicles are usually covered under warranty for the entire term, which means fewer repair costs. When you buy a new car, it’ll only be covered during the manufacturer’s warranty period, and you’ll be responsible for repairs after.
• Short-term vs. long-term ownership: Leasing may be for you if you want a new car every few years, but buying is better for long-term ownership.
• How much you drive: Leasing is typically best if you’re a low-mileage driver. You might prefer buying if you drive a lot.
• Up-front cash available: Leasing requires less cash up-front, whereas buying typically involves a larger down payment.
• Customization preferences: Only buying allows for full customization.

Leasing is ideal if you prefer short-term commitments and enjoy frequent upgrades for the latest technology and safety features. Buying is best if you want to keep your car over the long term.

Is Buying or Leasing a Car Better? Visit Titus-Will Hyundai To Find Out

There’s no universal approach to deciding whether leasing or buying is better. Leasing offers lower monthly payments and access to new vehicles, but you don’t gain equity or ownership. Buying requires a larger up-front cost and monthly payments. However, it ultimately provides ownership, freedom, and future savings. Consider your driving habits, budget, and long-term goals to make the best choice for your situation. Visit Titus-Will Hyundai to browse our available cars. You can also chat with our finance team about your questions regarding leasing and buying.

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