Should you lease or buy a vehicle? The answer really depends on your lifestyle, financial situation, and long-term goals. Here’s a clear breakdown to help you decide:
🚗 Lease vs. Buy: Quick Comparison
| Factor | Leasing | Buying (Financing or Cash) |
|---|---|---|
| Monthly Payments | Usually lower than buying | Typically higher |
| Ownership | You don’t own the car—must return it or buy it at lease-end | You own the car once paid off |
| Mileage Limits | Often limited (e.g., 12,000–15,000 km/year)—extra fees for overages | Unlimited mileage |
| Maintenance Costs | Often lower; car is under warranty | Higher as the car ages |
| Customization | Not allowed (car must be returned in original condition) | Fully allowed |
| Long-Term Cost | More expensive if you keep leasing long-term | More cost-effective if you keep the car many years |
| Equity | No equity—you return the car | Builds equity—you can sell or trade it in |
| Tax Benefits | Possible write-offs if used for business | Some tax benefits possible (e.g., capital cost allowance for business use) |
🧠 Consider Leasing If You:
- Want a new car every 2–4 years
- Prefer lower monthly payments
- Drive within mileage limits
- Like having the latest features and warranty coverage
- Use it for business purposes (potential tax deductions)
💰 Consider Buying If You:
- Want to keep a car long-term
- Drive a lot (high mileage)
- Prefer ownership and equity
- Plan to customize the vehicle
- Want the lowest long-term cost
🧮 Example:
- Lease: $350/month for 3 years = $12,600 + fees, return the car at lease-end
- Buy: $500/month for 5 years = $30,000, then no more payments, and you own the car
🔍 Final Questions to Ask Yourself:
- Do I need flexibility, or do I want to commit?
- Is cash flow more important, or long-term savings?
- Am I okay giving the car back, or do I want to build ownership?