When choosing between leasing and buying a car, consider your long- and short-term finances and your current lifestyle. Buying a car brings the advantages of ownership, but leasing saves you money in the short term and may provide more flexibility.
After reading this breakdown, you’ll have a better understanding of whether buying or leasing is right for you.
The Pros and Cons of Buying a Car
Buying usually saves you money over the long run once you have completed the payments.
There is no ceiling on mileage, so you can drive as much, or as little, as you want.
Owning a car becomes an asset once the car has been paid off, since you can trade it in when you are ready to upgrade.
When you buy a car, you are the official owner and can make changes to your car as you please.
Compared to leasing a car, buying a car generally comes with a higher monthly payment.
You will generally have to put down a bigger down payment when you buy a car.
The negotiating and effort involved in selling or trading in your vehicle can be a hassle.
You’re responsible for repair costs after the manufacturer’s warranty expires, unless you get an extended warranty.
Many buyers who take out a big loan for a car end up upside down on their loan and generally owe more than what the vehicle was originally worth. If you don’t want to make the long-term investment, consider leasing a car.
The Pros and Cons of Leasing a Car
When leasing a car, your monthly payment—and your taxes—are lower than if you were to buy a car.
More valuable, luxury cars are often available for lower payments when you lease.
It’s easier to change cars after a short period of time.
Leasing a car makes it’s easier for you to walk away from the vehicle when you want to upgrade.
You won’t own the car at the end of a lease, but you will generally have the option to buy it.
Trying to get out of a lease early can be very costly.
Buying and paying off a car loan can be cheaper in the long run compared to leasing.
If you are prone to switching cars frequently and are interested in saving money over a short period of time, leasing could be a good option for you. If you’re looking for long-term stability and ownership, consider purchasing a car.
Save for Your Car with Synchrony Bank
Whether you lease or buy a car, you’ll need to have the right financial tools to provide for the upkeep and maintenance for your vehicle. Synchrony Bank’s high yield savings accounts have no monthly service fees and are FDIC-insured up to $250,000, per depositor for each ownership category.
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*ANNUAL PERCENTAGE YIELD (APY): All APYs are accurate as of 05/25/2018.
APYs are subject to change at any time without notice. Offers apply to personal accounts only. Fees may reduce earnings. For Money Market and High Yield Savings Accounts, the rate may change after the account is opened. For CDs, a minimum of $2,000 is required to open a CD and must be deposited in a single transaction. A penalty may be imposed for early withdrawals. After maturity, if you choose to roll over your CD, you will earn the base rate of interest in effect at that time. The APY shown for CDs and IRA CDs is for a 60-month CD with a balance of at least $25,000. Click here for all CD rates and terms offered.
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NATIONAL AVERAGE: National Average APYs are based on specific product types of top 50 U.S. banks (ranked by total deposits) provided by Informa Research Services, Inc. as of 3/01/2017. CD Rates: Average APYs are based on certificate of deposit accounts of $25,000. High Yield Savings Rates: Average APYs are based on High Yield Savings Accounts of $10,000. Money Market Account Rates: Average APYs are based on Money Market Accounts of $10,000. Although the information provided by Informa Research Services, Inc. has been obtained from the various institutions, accuracy cannot be guaranteed. Please click on "Learn More" above for additional disclosures for each product.