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Leasing a Car vs. Buying a Car

The pros and cons of a major purchase.

So your car is on its last leg, literally. It only has one good tire left, very little braking power, bad steering control, the AC doesn’t work anymore, and it’s leaking oil. You decide it’s time to let old ‘Thunder’ go out to pasture and find a new KITT (the car from Knight Rider). Now you have a big decision to make; are you going to lease or buy your new ‘Chariot of Fire?’ This is an important decision to make, and there are several considerations to think about. Here are my top pros and cons of both leasing and buying.



First, you get to drive a new(er) car every three to five years. It’s kind of like the James Bond movies where you see him in a new ride every other scene. Except in this scenario the scenes last three years. If you’re more concerned about the appearance of your car, leasing could be a good fit as you can upgrade once your current lease is over.

Second, you could potentially have a lower monthly payment. This is contingent on several things like your credit score, income, expected miles, and things like that. However, if you fit in the car company’s golden mold you could get a pretty nice deal. But look in the cons section for how this could end up being a bad thing.

Third, you will most likely have a solid warranty on the car. So if it breaks down, the repairs may be covered under your warranty.


Leases have very strict usage, miles driven, and condition requirements. If you go outside of those, you could end up paying substantially. If you’re a person who drives a good amount or would use your car for anything other than just going to and from your office, leasing could end up biting you in the end with the extra fees associated with the contract.

In the end, leasing is usually more expensive than buying a car for a given time period. If there is anything wrong with the car that is not under warranty, it becomes your responsibility to fix before turning it in. Depending on the lease agreement, if you go outside of some of the parameters, which is very easy to do, you could end up paying hefty fines.



First, when you buy a car, it’s your car! If you want to put cool bull horns on it, install a train horn, and hydraulic wheels, go ahead. You can customize that baby anyway you see fit. You have absolute control over what you do with your car, to the extreme of driving it out of an airplane with a parachute on it.

Second, it’s your car! When you buy a car, you immediately start to build equity in it. Yes, it is a depreciating asset, but you own it, and if you take care of it, you could get a good sum of money for it when you sell it.

Third, there are no end of lease charges or fees with buying a car. You don’t have to worry.


Depending on the car you buy, your monthly payments could be higher. You may also have to put a larger down payment on the car than if you were to lease it. This is similar to the con of leasing in that you have to be in a financially viable position to buy a car.

You also have to take the cost of repairs into account. Since you’ll most likely own this car for a longer period of time, that means you’ll also run into more issues. Once the warranty on a new car runs out, all repair costs are solely on you. A very old car that you own outright could still cost you a good amount each month in needed repairs.

In conclusion, when you’re ready to upgrade your wheels, think about your end use of the car, and the pros and cons listed above before you make your decision. Then, once you’ve got the new car, call me at Capitol Insurance to make sure it’s properly insured.