Should You Buy or Lease a Car? Compare the Pros & Cons

Deciding between buying, financing or leasing a new vehicle is difficult. Like every major purchase, your choice will depend on you — your lifestyle, your wants, your finances.

How much money can you put in as a down payment? Do you drive more or less than 12,000 miles per year? Are you interested in customizing your ride? The answers to these types of questions will help you determine if you’re best suited as a car owner or a lessee.

Take a look at our list of advantages and disadvantages to both purchasing and leasing vehicles. 

Buying: Pros & Cons

Pros

  • You own the vehicle and get to sell or trade it whenever you’d like.
  • After paying off a loan, monthly payments are zero.
  • With every loan payment, you have built-in equity.
  • No mileage, customization or wear-and-tear restrictions.
  • Car insurance will eventually be lower.
  • Refinancing is available, which can save you some money if you financed a car with poor credit.

Cons

  • If the vehicle depreciates in value, you could lose money or even become upside down on a loan. (Read more about increasing the resale value of your car.)
  • In the short term (3-5 years), monthly auto loan payments are typically higher than a lease.
  • You must deal with selling or trading in your vehicle.
  • You pay sales tax on the full cost of the vehicle.
  • The new vehicle warranty will eventually expire.
  • You must perform all service, repairs and replace parts as needed.
  • It’s usually recommended that you make a large down payment (20%) to finance or purchase a new car.
  • Auto loan interest rates can be high.

In all, choosing to purchase a new car may make the most sense if you:

  • Drive more than 12,000 miles per year
  • Have enough cash saved to make a substantial down payment
  • Customize your vehicles
  • Want to keep your vehicle for more than 3 years
  • Can afford higher monthly loan payments
  • Are able to pay for future repairs out of pocket

Leasing: Pros & Cons

Pros

  • Lowest monthly car payments.
  • Covered by a full manufacturer warranty for the length of your lease.
  • You’ll always have access to the newest automotive technology.
  • No need to worry about depreciation values or becoming upside down on a loan.
  • Conveniently return the lease and walk away, re-lease, or purchase/finance another vehicle.
  • Lease Loyalty programs may enable you to return your vehicle and re-lease a new model without paying lease-end fees. 
  • A Honda lease includes GAP insurance coverage.
  • You can purchase the vehicle at its preset buyout price instead of returning it.
  • Easier to secure $0 down leases.
  • Driving the vehicle during its most worry-free years, so you shouldn’t have to pay extra for large repairs, replacements, or service.
  • May be eligible for a tax write-off (if you use your lease for business).
  • Can save lots of money on sales tax.
  • Can be a temporary option for shoppers who want to avoid buying a car during the chip shortage.

Cons

  • Monthly payments go on forever (if you continue leasing).
  • Car insurance costs will remain high (if you continue leasing).
  • No ownership = no equity.
  • Leases include mileage, wear-and-tear and customization restrictions; if you don’t stick to the terms, you’ll be charged overage fees.
  • Cannot terminate a vehicle lease early unless you meet certain criteria or pay a termination fee.
  • Lease lengths are usually only 2 or 3 years, with options to extend that lease for a short time.
  • Can be more difficult to get approved for a car lease with bad credit. (Read more about how you can fix bad credit.)
  • Repairs and maintenance must be performed by an authorized dealer or service center.

Leasing a car makes tons of sense if you:

  • Want a low monthly payment
  • Dislike the idea of having to sell a vehicle
  • Don’t drive more than 12,000 miles per year
  • Like having the newest tech and safety features
  • Want more than the base trim
  • Can take great care of the vehicle
  • Need a reliable vehicle that is always covered by a warranty

Lease Honda Phoenix



Speak with Your Valley Honda Dealers 

Have questions about leasing or buying a new Honda? Feel free to contact any of our Honda dealerships near Phoenix to request more details, ask for a quote, or start your financing application. We have specialists ready to assist you in Avondale, Peoria, Surprise, Tempe, Mesa, Prescott, Scottsdale, Chandler and Phoenix!