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Is a lease better than buying a car?

I was thinking about getting a lease, but my friend told me I should get a car loan instead. Is one better than the other? What are the pros and cons?

avatar
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
There’s a lot to think about when getting a new car! Leasing versus getting a
car loan
is an age-old question that is subjective than anything else. As a result, you’re going to have to weigh the pros and cons and decide what’s best.
Benefits of leasing a car include:
  • Free maintenance and a manufacturer’s
    warranty
  • Tax advantages for business owners
  • Getting a new car every few years without the hassle of trading in or selling the car
  • Lower payments than a car loan
Disadvantages of leasing are:
  • Paying more in depreciation costs than you would if you bought the car outright
  • Mileage limits
  • Possibility of excess wear and tear charges
Benefits of buying a car:
  • You own the car at the end of the term
  • You can drive as many miles as you want
  • Comes with a manufacturer’s warranty
Downsides of buying a car:
  • Depreciation is killer
  • You’re responsible for upkeep after warranty expiration
If you’re still unsure about what to do, find a vehicle you like and review both a loan and lease contract for it. Reviewing each agreement should give you a better idea of what each requires, along with the terms and conditions.
Regardless of whether you buy or lease a car, you’ll need full coverage car insurance on it. To easily shop around and explore your car insurance options, use the
Jerry
app. Jerry’s friendly agents are always available to answer any questions and ensure you’re getting the best rate and coverage.
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