Is It Better to Buy or Lease a Car?

Drivers looking for a new car are met with two financing options. They can either buy the vehicle, typically made possible via a loan, or they can lease it. For many, this is a difficult choice to make and both options have their unique pros and cons. 

On one hand, leasing a car is often more affordable. It usually comes with lower monthly payments and allows someone to be in a newer model year car without the hefty costs. On the other hand, buying a vehicle offers more flexibility, plus you own an asset in the end. Ultimately, the choice between buying vs. leasing a car comes down to personal preference and priorities. 

Since the pandemic, the car industry has changed in many ways. With more people working remotely, today’s shoppers are reassessing what they need from their vehicles. If you’re struggling with making the choice between buying or leasing a car, we’re here to help. Compare the pros and cons of buying vs. leasing below: 

Lease vs. Buy

The most notable difference between the two is ownership. One way of looking at leasing is to see it as an extended rental agreement. When you lease, you agree to a certain amount of time you’ll have the car. On average, car leases are 24 to 36 months long. During this time, you’ll pay monthly payments and once the lease is over, you return it to the dealer.

You might be thinking, “So, what’s the catch?” Of course, dealers need to ensure that the car only depreciates a set amount based on the length of the lease. To do this, car leases come with mileage restrictions. Each lease will vary in the number of allotted miles, though most range from 10k to 15k of annual mileage.

If the car is returned with more than the allotted amount, a fee will be charged per mile. This can add up quickly depending on how much the vehicle is returned over the set amount. For those that work remotely or commute less than 30-40 miles a day, this is a great choice. It allows them to have a lower monthly payment, and enjoy a new car every 2 to 3 years. 

Buying a car is fairly straightforward. You borrow money from a bank or financing institution and make monthly payments until the loan is paid off. Loans have interest rates, so each month, a chunk of the payment goes towards paying the interest on the loan. Higher interest rates mean higher payments. As you repay, you build equity until the car is officially yours. Though buying a car can have higher upfront costs, many people prefer it because of its flexibility. There are no mileage restrictions and you can customize it to your liking. 

Leasing a Car vs Buying a Car: Pros and Cons

Leasing Pros

If you enjoy upgrading to the latest and great vehicle every two or three years, leasing may be the best option. There are a number of benefits to leasing, including: 

• Lower payments: Leased cars, on average, have 30% lower monthly payments compared to buying a car. 
• Lower upfront costs: Most manufacturers run $0 down leasing offers. This could be especially beneficial to those who do not have a ton of upfront capital or a trade-in. 
• Newer model year: Because leases are done on new vehicles, it means you drive it during its most trouble-free years. Plus, newer model years have the latest technology. 
• Warranty coverage: Leases typically are covered under warranty for the entire duration of the contract. If you’re prone to expensive repairs, this could be a very attractive feature. 
• No buyer’s remorse: Because of the short contract lengths, you don’t have to worry about being stuck with a car you do not like. If you didn’t enjoy it, you can trade it in at the end of your lease. However, if you do love it, you typically can buy your leased car at any point during the lease. 
• No reselling: No need to go through the hassle of selling the car, and you don’t have to worry about fluctuations in price when you lease it. 

Leasing Cons

Leasing does have its pitfalls. Here are some things to consider:  

• Mileage restriction: Leasing comes with an allotted amount of miles. This is mainly to control the amount of depreciation in value. If you go over a certain limit, you will be charged per mile, which can range between .10 and .40 cents per mile. 
• No customization: When you lease a car, it must be returned to the dealer in factory-like conditions. This means you cannot add any accessories like roof rails or new wheels. You must also use extreme caution to not get any stains, tears, or dents on your vehicle. These blemishes can cost you a fee when you return the car to the dealer. 
• Other fees: Even though your car is covered under warranty, you will still be responsible for expendable items like tires, which could cost more than you’re used to on an upgraded model. 
• Early termination fees: If you are adamant about changing vehicles or you can’t afford monthly payments, trying to end your lease early can be pricey.  

Buying Pros:

If you want to get the most value from your car and you don’t mind driving older models, buying a car could be the right choice for you. While monthly payments might be higher, each one goes towards equity, when you will eventually own the vehicle outright. If you keep it in great condition, you can be driving your car for many years after the loan is paid off. 

• No restrictions: The car is yours, meaning you can customize it however you’d like, drive it however much you want, and treat it as good (or as bad) as you please. 

• Unlimited miles: Buying a car offers more flexibility because there’s no limit to how much you can drive. If you’re a road trip fanatic or commute long distances for work, this is an important factor to consider. 
• Long-term value: If you drive your car past the life of the loan, you will eventually have zero monthly payments. 
• Insurance costs: Insurance costs are generally lower on cars you own. 
• Personalization: When you buy a car, you can modify it to your wants and needs. If you need help finding the right parts, contact our team or check out our Kia parts and accessories e-store. 

Buying Cons: 

Though buying a car has its perks, it might not be the right investment for you. Consider these factors: 

• Higher monthly payments: Because you are paying for the entire vehicle, not just the depreciation, the payments will be higher. This means you may have to settle for an older model year to fit your budget. 
• Down payment or trade-in required: Generally speaking, new car purchases require a down payment or a trade-in. Check with the finance department before committing to ensure you get the best deal possible.
  
• Maintenance and warranty: Cars need to be maintained, especially the older they get. Older cars also are more prone to breaking down. With most dealers, cars are no longer under warranty after 3 years – but not with United Kia Imperial. We offer a Never-Ending Warranty on all new Kia vehicles that covers repairs on your powertrain for an unlimited time and unlimited miles. 

So, is it better to buy or lease a car? 

The bottom line: it depends on your priorities. To make sure you’re making the right investment, evaluate what is most important to you. If it’s important to have low payments and a newer model year you don’t have to worry about – leasing a car may be worth it. Just remember to assess whether it’s reasonable for your lifestyle to have mileage restrictions. On the other hand, if your goal is to get the most value for your money and you need flexibility, owning a car will be a better fit.

Still unsure? We’d be happy to help you make your decision!  Please feel free to visit us at our Imperial, CA storefront located at 2349 US Highway 86 or you can contact us online. We’d also love for you to follow us on Facebook and Instagram to stay up-to-date on the Kia news.