To Buy or Lease? That is the Question

When purchasing a new car the biggest question consumers are asking themselves these days are whether they want to lease the car or take out a car loan. Taking out a lease seems like the better deal over the car loan, but both options must be weighed before making a decision.

Much of what you decide to do will have to do with your financial situation. If you have good credit and a low debt to income ratio then you are going to look more financially secure to those that write the car loans than if you don’t have those things in your corner. It also depends on whether or not you are looking for a new car, for they are more likely to give you a good deal on a new car loan than a used one.

However, if you are getting a used car, if you are able to keep the repayment schedule short, then the car loan will seem more attractive than one in which the consumer is looking to spread the payments out over a long period of time. But if you have bad credit, or quite a bit of debt already – it will be tougher to get a car loan as they may not be as willing to take a risk on you.

With a lease, you are almost always looking at a new car, and you have to have pretty great credit to get it. Not only that, but it depends on what you want at the end of the lease. After you make all of your payments on your car loan, you have the car free and clear. At the end of your payments on a lease, you don’t have anything.

Instead you have to start all over again with a new down payment and a new car. This is good for people who travel a lot or like just getting a new car every couple of years, but for the majority of people it is tough to throw away your money for a couple of years only to have nothing to show for it.



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