To be or not to be? Should I stay or should I go? Is it better to lease or buy a car? All good questions, though the first two might depend on your personal life a bit more than would allow us to get into. So let’s discuss buying and leasing. There’s a lot to consider on this topic, though the first and more important thing to consider is what exactly leasing and buying means when it comes to cars and other vehicles.

What does it mean to lease a vehicle? Well, leasing is a complex thing, but it comes down to paying a fraction of the whole vehicle’s worth at signing then paying off the depreciation that occurs once it’s off the lot through monthly payments until you return the vehicle at the end of the lease. According to Mr. Ed Automotive Financing (Phoenix, Az), some of the terms that are important to keep in mind when leasing include: Capitalized cost, the price of the vehicle; Residual Value, the expected value at the end of the lease; and Money Factor, which is basically the interest rate you’ll be paying.

While there will be other fees, the easiest way to get an idea of how much a lease will cost you is to take the capitalized cost and subtract the residual value.

On the other hand, what does it mean to buy and finance a vehicle? Well, like most things, buying a vehicle means it becomes your property, unlike leasing which always ends with you returning it. However, since cars aren’t cheap commodities, there are generally more steps involved. That’s where financing comes in. Similar to leasing, there will be a down payment followed by monthly payments. However, unlike leasing, the financing will cover the entire cost of the vehicle instead of just the depreciation and once all payments have been made the title officially becomes yours.

Why would you lease? Well that a lot of reasons really. For instance, money. Leasing will generally always be the cheaper option because you’re not paying off the whole car (this is the same if you choose to do van leasing too). This comes in the form of lower monthly rates, a lower down payment, and lower taxes. There’s also incentives for warranty and maintenance. As long as you stay within the milage constraints set when you begin your lease you’re going to stay within the manufacturer’s warranty for the length of your lease, and most leases will include some form of maintenance included as part of the deal.

Why would you buy? The biggest boon for most people when it comes to buying a car is the fact that you would actually own it. And with ownership comes perks that a lease just can’t accommodate. Some of these perks include not having mileage restrictions the way leases do, customization possibilities that aren’t possible with a lease because you have to own something to be able to change it, and a finite number of payments since once you pay it off it’s yours to do with as you please. Additionally, a car you’ve bought can be used to supplement your next car purchase as a trade-in, which you can also do whenever you please unlike a lease that basically has a return by date attached.

So which should you do? Well that’s still ultimately up to you. You should take into account how much you have to spend, how long you hope you have the vehicle you’re interested in, and not just what you plan to do with it but how much you plan to do with it. There’s no simple, universal answer, but by weighing the options that each offers you’ll be able to find the one that will work best and make the most sense for you.


Earthgarage – Greener Car. Fatter Wallet.