5 Factors to Consider When Buying a Car Vs. Leasing

Quick Summary: Deciding between buying a car vs leasing is a significant financial decision that depends on various factors, including your lifestyle, budget, and long-term goals. Understanding the pros and cons of each option can help you make an informed choice. At CCCU and the CCCU-owned auto brokerage Members Auto, we’re here to guide you through the process and ensure a smooth, stress-free experience.

When it's time to get a new vehicle, one of the biggest decisions you’ll face is whether to buy or lease. Both options have their own set of benefits and drawbacks, and the best choice depends on your personal circumstances and financial goals. Here are five key factors to consider when deciding between buying a car vs leasing.

1. Ownership and Equity

Buying: When you purchase a car, you gain full ownership after paying off the loan. This means you can keep the car as long as you like, build equity over time and eventually sell it or trade it in for a new vehicle.

Leasing: Leasing a car is similar to renting. You make monthly payments to use the car for a set period, usually two to three years. At the end of the lease, you return the car to the dealership and do not own the vehicle. There’s no equity built in a lease, but you have the flexibility to drive a new car every few years.

2. Monthly Payments

Buying: Monthly payments on a car loan are generally higher than lease payments because you’re paying off the full value of the car, plus interest, over time. However, once the loan is paid off, you no longer have monthly payments and own the car outright.

Leasing: Lease payments are typically lower than loan payments because you’re only paying for the car’s depreciation over the lease term, not the entire value of the car. This can make leasing a more affordable option in the short term, but you’ll have ongoing payments if you continue to lease vehicles.

3. Mileage Limits and Wear

Buying: When you own a car, you can drive as much as you want without worrying about mileage limits. You also don’t have to worry about excess wear and tear penalties, which are common in leasing agreements.

Leasing: Most leases come with mileage limits, usually between 10,000 to 15,000 miles per year. Exceeding these limits can result in hefty fees. Additionally, you’re responsible for keeping the car in good condition to avoid charges for excessive wear and tear.

4. Customization

Buying:  Once you paid off your car, you have the freedom to customize your vehicle as you please. Whether it’s adding new rims, a sound system, or custom paint, you have the freedom to make your car uniquely yours. If you’re still making payments to your car, check with your dealership to learn about the full terms and conditions when you customize it as rules may differ.

Leasing: Customization is generally not allowed in a lease agreement. Since the car will be returned to the dealership, it must remain in its original condition except for normal wear and tear.

5. Long-Term Costs

Buying: While buying a car may have higher upfront costs and monthly payments, it’s often more cost-effective in the long run. Once the loan is paid off, your only ongoing expenses are maintenance, car insurance and taxes.

Leasing: Leasing may seem less expensive in the short term but it can be more costly over time if you continually lease new vehicles. You’ll always have monthly payments and you won’t build any equity.

How CCCU and Members Auto Can Help

If you need help deciding between buying a car vs leasing, CCCU and Members Auto are here to make the process smooth and stress-free. At Members Auto, we offer a wide selection of new and used vehicles, competitive financing rates and personalized service to help you find the perfect car that fits your lifestyle and budget.

Ready to explore your options? Visit Members Auto to browse our current inventory or follow us on Facebook for the latest updates or call at 702-939-3115.