Buy or lease? That is the question confronting car owners today. And while the sales people at a dealership will always push a lease on their customers, research shows that, in fact, it is better to buy and own a vehicle outright than to lease one. Sure, people can have access to a new model car every few years when leasing, but the terms and conditions that accompany a lease are often restrictive, punitive and downright expensive. In the long run, buying a car, truck, mini-van or sport utility vehicle and paying it off makes more financial sense. Here are 15 reasons why it is better to buy your next car than to lease it.
15. Eventually the Monthly Payments Stop
Car dealerships favor a lease because, essentially, a lease amounts to never ending monthly or bi-weekly payments. When one lease ends, the dealer puts you right into another lease—ensuring that the payments continue. The most obvious benefit to buying a vehicle is that you will eventually pay it off and then get the satisfaction of driving it without any monthly payments. As a general rule of thumb, people should buy a car that they will be able to pay off in three years or 36 months. Then, keep the car for at least eight years, and drive it for five years payment free. Leases may provide lower monthly payments, but those monthly payments never stop, making them a trap for people.