Should You Lease Your Next Car?

In the situations that follow, buying—either financing or purchasing a vehicle outright—makes more sense.

You drive a lot or put a lot of wear and tear on your car. Most leases cap how many miles you can drive—usually 10,000 to 15,000 per year—and will charge you 10 to 30 cents for every mile you go over your limit. For many people, that’s not enough mileage. Leased cars also have to be returned in good condition as part of the contract, so if you have a messy pet or tend to attract dings and dents, you’re better off buying.

You plan to keep the car for a long time. You’ll have no monthly payments after your car is paid off, but it will still have resale value. By contrast, you’re left with nothing when a lease is up. “Are you then prepared to go into another lease with another down payment and potentially higher monthly payments if you don’t put a lot down?” asks Melinda Zabritski, senior director of the financial solutions team at Experian Automotive.

Your needs may change in a year or two. “It’s hard to get out of a lease before its term is up,” says Gabe Shenhar, associate director of the CR Auto Test Center. Buying makes more sense if you think your needs may change—if, say, you expect to need a larger car or you may have to drive more miles than a lease may allow.