The difference between Buy vs. Lease

There are advantages to both buying a car and leasing a new car. It is important to understand the differences between the two and realize which one is more appropriate for you. Different shoppers have different habits and interests when it comes to their car or truck and lease may be more fitting for you. For example, if you like to have a new car every 2-3 years, you will probably want to lease. Or if you enjoy making customizations to your car or drive a lot of miles in your vehicle, you may want to purchase the car or truck. Continue reading to see the differences between buying a car and leasing a car.

Why lease a vehicle?

So, why lease a Ford in the first place? The big advantage is freedom. You aren't making a long-term commitment. When the lease period is up, you can simply bring the car back and walk away, or you can buy the car or truck by paying off the remaining balance.

Since you are only "renting" the car, your total cash expenditure is typically much less. Your down payment will be much less than if you were buying the car or truck. And monthly lease payments are almost always less than payments would be if you bought the car or truck. Because leasing is less expensive than buying, you can usually afford to drive a more expensive car when you lease, since the monthly payments will be comparatively lower. This is one of the biggest single attractions of leasing for many people. A car or truck that might cost you $500-$600 per month to buy might be $100 per month less to lease.

Another benefit of leasing is that you're always driving a new or nearly new vehicle, and you won't have to worry about the major repair and maintenance problems that inevitably crop up as a car ages. The leased Ford will typically be under factory warranty for the duration of the lease, and many lease contracts have additional provisions that cover routine maintenance, such as oil changes.

Why buy a vehicle?

When you buy a car or truck you have the comfort of knowing that eventually the car will be paid for and it will be free transportation until it breaks down or you decide to sell the car or truck.

In addition, a person who owns their Ford car or truck has built value in the Ford. Even though it will depreciate with each passing year, it will always have some value. That value can be used as a trade-in, or the vehicle can be sold privately for the car's current value. The person who leases must start from scratch every time.

There's also the concern for mileage. If you lease a vehicle, the lease agreement will undoubtedly dictate a maximum number of miles you're allowed before the end of the lease. If you exceed the mileage, there might be penalties. The person who owns their car can drive it as much as they like. They can change the stereo, add different wheels, change the exhaust system, etc. If you own your vehicle, the inevitable door dings and dents can be shrugged off.

When deciding between buying a car or leasing, remember the following tips:

• Short-term customers should lease. Consider a lease if you get a new car more than once every three years; if you plan to drive your next car longer than three years, buy it.
• New cars and trucks depreciate rapidly - buying a new vehicle every 2-3 years is a certain money-loser. Leasing will almost always save you money. On the other hand, a new car can be expected to last reliably with proper care for at least 8-10 years and 100,000-plus miles. If you keep the car long enough, it will pay for itself -- and you will save money over the long term.