Auto Loan
Lease vs. Buy
At Direct Federal, we help you make smart financial decisions and find the product or service that best meets your financial situation. Deciding whether to buy or lease a car is an important decision. Here are a few things you should know to help you decide what’s right for you.
What’s right for you?
Auto manufacturers and dealers push their leasing programs as affordable alternatives to get you behind the wheel. But, in the long run, how do you know if leasing a car makes more sense than buying? Here’s some information to help you with your own lease vs. buy calculation.
When to lease
In general, leasing may make the most sense when you:
- Wish to have a new car every few years
- Want a more expensive car than you otherwise may be able to purchase
- Don't expect to put a lot of miles on your car, as there are fees for exceeding mileage limits stated in the lease agreement
- Take excellent care of your car because excessive wear and tear may result in losing your security deposit; Keep in mind that even though you don't own the car, you're still responsible for repairs and maintenance
- Have complete insurance coverage; If your leased car is destroyed or stolen, you'll want your insurance company to cover what you still owe to the leasing company
When to buy
Buying may make sense when you:
- Plan to keep your car for more than three years
- Put over 12,000 miles per year and/or wear and tear on your car
- Want to own your vehicle and "drive for free" after your loan is paid off
- Don’t want to pay for the higher insurance coverage most leases require
