Auto Loan vs. Leasing: Which Option is Right for You?

Buying vs. Leasing: The Complete Guide

When it's time for a new vehicle, you have two main options: buying with an auto loan or leasing. Here's how to decide.

Buying with an Auto Loan

Pros:

You own the vehicle outright after payoff

No mileage restrictions

Can customize the vehicle

Usually cheaper long-term

Cons:

Higher monthly payments

Responsible for maintenance after warranty

Vehicle depreciation is your loss

Leasing a Vehicle

Pros:

Lower monthly payments

Always drive a new car

Warranty coverage for lease term

Predictable costs

Cons:

Never build equity

Mileage limits (typically 10-15K/year)

Potential end-of-lease fees

Must maintain condition

Cost Comparison Example

For a $35,000 vehicle over 3 years:

FactorBuyLease

Monthly Payment~$650~$400 Total Paid (3 years)$23,400$14,400 Vehicle Value After~$22,000$0

Which is Right for You?

Choose Buying if:

You keep cars 5+ years

You drive more than 15,000 miles/year

You want to customize

You value ownership

Choose Leasing if:

You like new cars every 2-3 years

You drive under 15,000 miles/year

You want lower payments

You prefer predictable costs

Use our Auto Loan Calculator to see what your payments would be when buying.