Buy vs Lease

Disclaimers

	Buying	Leasing
Ownership	Whether you pay for the car with cash, or finance it and make monthly payments, you own the vehicle and get to keep it as long as you want it. Of course, if you're financing it, you'll have to meet the obligations the lender requires, like a certain down payment amount and timely monthly payments. If you don't, they have the right to repossess it.	You don't own the vehicle. You're paying for the use of the vehicle, but the finance institution that you leased it through actually owns it. This is usually why you pay less per month in a lease than if you were to buy the car. You get to use it but must return it at the end of the lease unless you decide to buy it.
Up-front costs	They include the cash price or a down payment, taxes, registration and other fees. You can also trade-in another vehicle and use any equity towards your down payment	They typically include the first month's payment, a refundable security deposit, a down payment, taxes, registration and other fees. But, as with a purchase, if you want to lower your monthly payments you can always pay more upfront
Monthly payments	Loan payments are usually higher because you're paying off the entire purchase price of the vehicle, plus interest and other finance charges, taxes, and fees.	Lease payments are almost always lower because you're paying only for the vehicle's depreciation during the lease term, plus interest charges (called rent charges), taxes, and fees.
Early termination	You can sell or trade in your vehicle at any time. If necessary, money from the sale can be used to pay off any loan balance.	If you end the lease early, early-termination charges can be almost as costly as sticking with the contract.
Vehicle return	You'll have to deal with selling or trading in your car when you decide you want a different one.	You can return the vehicle at lease-end, pay any end-of-lease costs, and walk away.
Future value	Your vehicle will be worth whatever you can sell it for in the future and that depends on how well you maintain it. The vehicle will depreciate but its cash value is yours to use as you like.	On the plus side, its future value doesn't affect you financially. On the negative side, you don't have any equity in the vehicle. In most leases you don't end up owning it so you don't end up selling it. That's the financial institution's job. Although you may have mileage limits and wear and tear guidelines that, if you exceed them, could cost you extra money when you turn your vehicle back in.
Mileage	You're free to drive as many miles as you want. (But higher mileage lowers the vehicle's trade-in or resale value.)	Most leases limit the number of miles you may drive, often 12,000 to 15,000 per year. (You can negotiate a higher mileage limit.) You'll have to pay charges for exceeding your limits.
Excessive wear and tear	You don't have to worry about wear and tear, but it could lower the vehicle's trade-in or resale value.	Most leases hold you responsible. You'll have to pay extra charges for exceeding what is considered normal wear and tear.
End of term	Once you've paid off what you owe on your contract, that's it. Your vehicle is 100% yours. At the end of the loan term (typically four to five years), you have no further payments and you have built equity to help pay for your next vehicle.	Most people return the vehicle at the end of the lease term (typically two to four years). But some like to purchase it during their lease or at the end. Others like to trade it in before their lease is over. Just ask us about these different options before signing any paperwork and we'll make sure you have your lease set up the way you want it.
Customizing	The vehicle is yours to modify or customize as you like	Because the lessor wants the vehicle returned in sellable condition, any modifications or custom parts you add will need to be removed before you return the car. If there is any residual damage, you'll have to pay to have it fixed.