Leasing vs Buying a Car: Which is Better for You?

August 7th, 2023 by

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Making the Right Lease vs Buy Decision at Westlie Ford

When it comes time to get a new car, one of the first decisions you’ll need to make is whether to lease or buy your next vehicle. Both options have their own pros, cons, and costs associated with them. In this comprehensive guide from Westlie Ford, we’ll walk through everything you need to know about leasing versus buying a car so residents in the Vancouver area can make the best and most informed decision for their needs.

For many people, a car is their main mode of transportation and often the second largest purchase they’ll make behind a home. With car prices steadily on the rise along with loan interest rates, it’s more important than ever to understand your options when it comes to financing or leasing a new car.

Leasing and buying both allow you to get a brand new vehicle, but the terms, monthly payments, and long-term costs can differ greatly between the two options. When researching, you need to look at factors like:

  • How long you plan to keep the car
  • Your expected annual mileage needs
  • Your budget and capabilities for a down payment
  • Whether you want access to new cars frequently
  • The importance of ownership and equity

This guide from Westlie Ford serving Vancouver, WA will outline the pros, cons, terms, and costs associated with both leasing and buying a new car. We’ll also discuss the key factors to help you determine which option may be better based on your individual situation and needs. Armed with this information, you’ll be prepared to make an informed decision on leasing versus buying your next car.

Pros of Leasing a Car

Leasing a car has a number of advantages that make it an attractive option for many people. Here are some of the main benefits of leasing a new car:

  • Lower Monthly Payments: One of the biggest pros of leasing is that it usually results in a lower monthly payment compared to financing a car purchase. With a lease, you’re only paying for the vehicle’s depreciation during the lease term plus rent charges, not the entire cost of the car.
  • Getting to Drive a New Car More Often: Typical car lease terms run 24 to 36 months. This allows you get into a new car more frequently than if buying, which appeals to people who enjoy driving new model vehicles. At the end of your lease, you can simply trade it in for another new car.
  • Lower Upfront Costs: Leasing a car normally requires lower down payments and initial out-of-pocket costs vs. buying. For example, a lease may only require first month’s payment plus taxes and fees up front, while financing a purchase often requires 20% or more as a down payment.
  • Simplified Maintenance: Most leases include routine scheduled maintenance and warranty coverage, so you don’t have to worry about paying for oil changes, tire rotations, etc. Any repairs will also be covered if you experience problems.
  • No Hassle of Selling the Car Yourself: At the end of the lease term, you simply turn the car back in to the dealer. You avoid the hassle of having to sell a used car on your own when you are ready for something new.

To better help your specific situation, look at our payment calculator tool to help understand your monthly payments.

Cons of Leasing a Car

While leasing does have some attractive benefits, there are also disadvantageous aspects to consider:

  • Mileage Limits and Wear and Tear: Most auto leases limit the number of miles you can drive annually, usually 12,000-15,000 miles per year. If you go over the mileage limit, you’ll have to pay steep overage fees. Leases also require you to return the car in good condition, beyond normal wear and tear, or you may face charges for dings, dents, scratches, etc.
  • No Equity or Asset Ownership: With a lease, you do not build any equity in the vehicle. You are essentially renting it for the term. At the end, you have no asset ownership or trade-in value like you would if you purchased the car.
  • Potential Extra Fees: Leases can include early termination fees if you want to get out of the contract early. And at the end, there is often a disposition or turn-in fee charged when you return the car.
  • Higher Insurance Costs: Insurance rates are typically higher for leased vehicles than cars that are owned/financed. Full coverage car insurance is required on leases.

Person filling out a form to lease a car

Pros of Buying a Car

Purchasing a car has its own set of advantages:

  • You Own the Vehicle: When you purchase a car by taking out an auto loan, you eventually build equity as you pay down the principal loan balance. Once the car is paid off, you own it outright and can keep driving it or sell/trade it in for something new.
  • No Mileage Limits or Turn-In Fees: With an owned car, you can drive as many miles as you want without worrying about overage fees. There are also no turn-in inspections or disposition fees like at the end of a lease.
  • Customization and Modifications: As the owner, you have the freedom to customize or modify a purchased car however you wish. With a leased car, any modifications need to be reversed when you turn the car in.
  • Potentially Lower Insurance Costs: Depending on your driving record and profile, full coverage insurance rates may be lower for a financed used car compared to a leased vehicle.

Cons of Buying a Car

While buying a car has its advantages, there are also some drawbacks to consider:

  • Higher Upfront Costs: Financing a car purchase requires a much larger down payment, usually at least 20% of the car’s value. Monthly payments are also typically higher than leasing since you are paying off the entire vehicle cost, not just its depreciation.
  • Responsibility for Maintenance and Repairs: Once warranties expire, you as the owner are responsible for paying for all maintenance, repairs, and mechanical issues. With a lease, much of this is covered.
  • Faster Vehicle Depreciation: A new car loses a significant portion of its value in the first couple years of ownership. With a lease, you only pay for the depreciation that occurs in your use period.
  • Hassle of Selling the Car: When you are ready for a different car, you have to sell your used car which can be time consuming and problematic. With leasing you simply turn the car in.
  • Higher Upfront Sales Tax: When financing a purchase, you must pay the full sales tax on the car’s value upfront. With leases, sales tax is spread into the monthly payments.

Now that we’ve covered the pros and cons of both options, let’s look at the key factors to weigh.

Salesperson handing keys to a car buyer

Key Factors to Consider When Deciding Between Leasing or Buying

When trying to determine if leasing or buying is the better option for you, here are some of the most important factors to consider:

  1. Length of Time You Plan to Keep the Vehicle: How long do you typically keep a car before wanting a new one? Short term leases of 2-3 years are best for people who like frequently getting new cars. Buying is better for keeping a car 5+ years.
  2. Your Annual Driving Mileage Needs: If you drive under 12,000 miles per year, a lease may suffice. But if you drive long distances regularly, buying is better to avoid mileage overage fees.
  3. Your Budget and Capabilities for a Down Payment: If you have limited funds saved, leasing may work better as it requires lower down payments. Buying requires larger down payments and overall budget.
  4. Desire to Drive New Cars Frequently: Leasing allows easy transitions into new cars every few years. Buying requires committing to the same car for a longer period.
  5. The Importance You Place on Ownership: If you like the pride and freedom of owning your vehicle, buying is likely the better option. Leasing limits those aspects.
  6. Who Will Be Responsible for Maintenance and Repairs: Leases cover maintenance, so if you want to avoid that responsibility, leasing is preferable. Buying means you pay for all repairs.
  7. Your Desire for Customization and Modification: If you want to customize your car, buying is better. Leases restrict changes to the car.

Now let’s look at how to make the right choice for your situation.

Making the Best Lease vs Buy Decision for Your Situation

With all of the factors to balance, making the right leasing versus buying decision can feel overwhelming. The finance experts at Westlie Ford are here to guide you through the process of choosing the best option for your particular needs.

First, visit our finance center or have an open discussion with our finance team about your driving habits, budget, desired car features, and interest in frequent newer vehicles versus longer ownership. We can help weigh the pros and cons for your specific situation. Get detailed quotes from us for both leasing and financing your desired cars. Compare the bottom line costs, monthly payments, and overall terms side-by-side. If budget is a top concern, leasing may allow you to drive a nicer new car for less money than purchasing.

Be sure to understand the fine print of mileage limits, wear and tear clauses, disposition fees, etc. if opting to lease. Then, test drive your top choice vehicles on our lot full of new Ford models. Choose the one that best fits your lifestyle and needs for the next few years. Take advantage of the years of experience our finance experts have with both financing and leasing. We can guide you to the better option based on your unique circumstances and goals.

The more informed you are, the better equipped you’ll be to make the ideal leasing versus buying decision. The team at Westlie Ford is here to help navigate you through all of the factors to make the smartest choice. Visit our dealership serving Vancouver, WA residents to speak with our finance team, test drive new Ford vehicles, and apply for car financing or leasing!



Reviewed By: Ryan Dickerson, General Manager

With over two decades of experience across all facets of the automotive business, Ryan Dickerson leads Washougal’s Westlie Ford dealership with an unmatched passion for Ford vehicles. Applying his expertise in sales, finance, management, and customer service, he provides Westlie Ford clients with personalized guidance on finding the right Ford cars, trucks, SUVs, and crossovers to fit their needs. Known for taking a genuine interest in each customer, he ensures car-buyers receive the small-town friendly experience Westlie Ford is known for, while still providing big-dealership selection and value. Along with doing what he can with helping the local community, Dickerson stays up-to-date on the latest Ford models and technology.


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