How To Buy A New Car – Or Lease?


How to buy a new car with a loan or a lease is often the biggest question for those shopping for a new set of wheels. To help you decide which option is best for you, you should think about your lifestyle and your budget.

There are a couple of things to contemplate when deciding if buying or leasing is the best option for you. You should consider your lifestyle. Do you want to drive a new car every three years? Do you want your monthly payments to be lower? Do you have enough liquid cash to put towards a down payment? How long do you hope to keep your vehicle? Do you want to worry about how many miles you are driving every year?

There are pros and cons to both buying and leasing when considering how to buy a new car. You will want to consider the cost of driving the car over an extended period of time. This will include factors such as maintenance costs, insurance, taxes, down payments, and monthly payments.

How To Buy A New Car With A Lease


  • You will be driving a new car every few years.
  • Your up-front expenses are generally lower.
  • Your monthly car payments will routinely be lower.
  • Maintenance costs are low or often non-existent as most cars have a 3-year warranty which is usually the duration of a lease.
  • You may be able to drive a nicer car than what you could afford if bought outright.


  • Insurance rates may be higher because ‘gap insurance’ is often included in lease coverage.
  • You may end up paying extra fees for wear and tear considered above average and for additional miles exceeding the allowable miles of your lease agreement.
  • Leasing a car does not build up equity like owning a car.
  • It is harder to get approved for a lease than a loan, so not a good option if your credit is not so good.
  • Your mileage is limited as is your ability to modify or change the vehicle in any way.
  • May cost you more over the long run, and you will not own anything at the end of your lease.
  • If you terminate your lease early, you will pay high early termination penalties.

How To Buy A New Car With A Loan


  • You will own your vehicle.
  • There are no restrictions on changing or modifying the vehicle if you so choose.
  • There are no mileage penalties; you can drive as much as you want.
  • You can sell the car anytime.
  • Is more cost effective over the long run.


  • You will likely be required to put down a higher down payment.
  • Your monthly payments will be higher as you are financing the cost of the entire vehicle.
  • All maintenance costs are your responsibility.
  • When a car is driven, it depreciates or reduces in value. When you purchase a car, the depreciation is your burden as the car owner.

How to buy a new car or when you should lease instead should be carefully considered. I have done both and found there were positive and negative aspects to each. When I was younger, I certainly enjoyed driving a new car every few years without incurring much in the way of maintenance costs. However, as I got older, I became fond of the idea of paying off a vehicle and having no car payment!