When it comes to purchasing a new or certified pre-owned vehicle, there are two different ways of going about it. You can either finance or lease, but it’s essential to choose carefully. While both processes get you behind the wheel of a car, truck, or SUV, they each come with a list of pros and cons. On top of that, they can affect your financial situation differently, so it’s crucial to do your research before stepping foot into a dealership. To help you decide between the two, continue reading our buyer’s guide, where we break down the basics, the pros, and the cons of buying versus leasing.

Buying vs. Leasing: The Basics

Before we break down the pros and cons, let’s go over the fundamentals of buying and leasing. To buy (or finance) a vehicle is to agree to make monthly payments until you own your new purchase outright. Ultimately, this route is seen as a better investment. However, newer models tend to quickly lose value because everyone will always want the “next best.” Leasing a new vehicle can be thought of as a rental agreement. To lease a car, you agree to make monthly payments in exchange for borrowing the car for a specified period of time. Once your contract expires, the vehicle will need to be returned to the dealership, and you walk away with nothing in return. The only thing these two processes share in common is that they both will come with an interest rate that is set by the lender/dealership.

Pros and Cons of Buying

One of the main pros of financing is ownership and the promise of not having a car payment once you’ve paid off your vehicle. Buying also allows you to take advantage of 0% financing offers and the flexibility to modify your vehicle to make it yours. Want a custom wrap? Feel like lifting the suspension on your truck? Unlike leasing, customizations are no problem when you own your vehicle. Another great advantage is that there are no mileage restrictions, meaning you can drive your new ride as much as you like, which is different from when you lease. On the other hand, the bigger the number on the odometer, the sooner your warranty runs out. The main con of financing is the higher monthly costs which tend to be lower when leasing, even if it’s the same make, model, and year.

Pros and Cons of Leasing

While most of the pros for buying a vehicle are the typical cons for leasing, there are some reasons why leasing could be considered more favorable. The majority of the time, those who buy vehicles are in it for investment purposes. In contrast, those who lease can enjoy the newest models every few years with the protection of a factory warranty. On top of that, leasing often comes with lower payments and hardly any risk since your car isn’t your car. Plus, when your costs are on the cheaper side, you can afford a newer and nicer vehicle than if you financed. While there is the pain of mileage restrictions, you can quickly grasp what your mileage cap should be by simply tracking how many miles you drive per year.

Now is the Perfect Time to Buy!

Now that you’re an expert in buying versus leasing, it’s time to shop! Browse our exclusive inventory of new and certified pre-owned cars, trucks, and SUVs from Five Star Automotive. Value your trade-in online, research your desired model, and contact us today to begin the effortless buying process.

We look forward to working with you.

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