Buy vs. Lease: Which is Right for You?

Advantages

• Leasing a vehicle gives you the opportunity to drive a better-equipped car for less money each month.
• Leasing can be cheaper compared to buying and owning a vehicle. If you lease a car, you pay lower monthly payments and a lower down payment, or sometimes no down payment at all!
• You almost never have repair costs, apart from paying for regular maintenance and any repairs due to collisions. With a 36-month lease, your factory warranty covers most issues related to vehicle defects. If you lease from our Birmingham car dealership, you even get free oil changes for life!
• You get a new car every few years, and that includes the latest technology.
• You'll never have to worry about the vehicle's resale or trade-in value, or selling it privately. Just turn it in before your lease maturity date and walk away.
• Leasing could come with significant tax advantages for companies and business owners.
• Unlike financing a car, you don't have to stress out about being "upside down" on a lease.
• If you re-lease, you'll be eligible for "loyalty discounts" in the form of waived disposition, mileage and wear and tear fees.
• When you sign your lease contract, you will have a "buyout price" in the amount of the estimated and anticipated residual value. If the market is wonky - like it is during the 2021-2022 chip shortage - buying out your leased vehicle is usually a better deal than purchasing or leasing another car.

Disadvantages

• Mileage restrictions can be troublesome for frequent drivers. Most car leases cap your annual mileage at 10,000-12,000, and if you go over that cap, you'll be forced to pay excess mileage fees, which could be quite expensive.
• Wear and tear, including stains and dents, can also hit you with a Wear and Use fee. Some small problems, like minor scratches, may not be a problem, but be wary of leasing if you don't normally take care of your car.
• If you need to return the leased car early, you may have to pay an early termination fee or the remainder of your lease balance. 
• If you re-lease continuously, you'll always be paying to "rent" your vehicle. You're never building equity.
• You cannot alter your leased vehicle with anything permanent. That means no tinted windows, spoilers or aftermarket stereo equipment. At lease-end you must return your vehicle in the same shape and condition as when you leased it. 
• You'll pay a disposition fee when you return your lease. The only way out of that is to re-lease from the same brand.
• You cannot lease a used car for sale.

Advantages

• Once you have paid off your vehicle, you own it outright and no longer have a payment. In the long term, buying or financing a car is cheaper.
• Since you are the prime owner, driving long distances is not a concern because you are not limited to a specific number of miles each year. 
• You can also modify the car however you want. Customization is entirely up to you.  
• You won't be charged anything for excessive wear and tear.
• You'll have a vehicle to sell when you want to sell it.
• Car insurance may be cheaper since your vehicle is older.

Disadvantages

• Buying a car gives you more freedom, but it also comes with more responsibility. You'll be required to pay for your own repairs because the vehicle won't likely be under warranty.
• When making a purchase, you have to pay more money upfront. A higher down payment is required, and monthly payments cost more. You must also pay sales tax. 
• Since car maintenance is your responsibility, you have to pay for oil changes and tire rotations.
• When it comes time to buy another new car, you have to deal with trade-in and selling hassles.
• You may end up "upside down" on your car loan if its resale value plummets or there's no market for your specific vehicle. An unpredictable market is not your friend when you're a car owner.