Should I Buy or Lease My Vehicle?

January 5th, 2021 by

Getting a new car is one of the most exciting experiences as an adult. For a lot of people, the type of car we drive is an extension of ourselves.

We’re not saying that the nicer the car you drive, the better you are. However, the style of car you buy and how you take care of it can provide insight into your personality.

However, this leads us to the age-old question. Is it better to buy or lease a car? There are plenty of pros and cons on both sides of the argument. Don’t feel bad if you’re having trouble coming to a decision.

We’re here to help. Keep reading as we help you determine which option is best for your needs.

Upfront Costs

First, let’s look at the upfront costs you can expect to pay. Each option has different initial costs. Regardless, there will be other expenses that go along with driving a vehicle, such as insurance premiums, registration fees, and taxes


When leasing a car, you don’t need to worry about coming up with a sizeable down payment, as you would when buying a car. However, there are upfront fees, such a the first month’s payment, and a refundable security deposit.


When buying a car, it’s advisable to put down at least 20% of the car’s value. Though this isn’t required, a low or zero-dollar down payment will likely result in much higher interest rates. You need to factor this into your new car budget.

It may also be more difficult to get approved for an auto loan without a down payment. In some cases, buyers are forced to wait a few months to build up their credit score before they are eligible for a loan.

Long Term Costs

Now, we need to take a look at the long term costs of each choice. Whether you buy or lease a car, you need to consider how it will affect your future finances.


If you buy a new car, you need to consider the costs of depreciation. New cars can lose as much as 30% of their value in the first year. If you buy a new car, you’re the one paying for depreciation.

However, when you go to replace that car, you can sell it to make up some of the money you’ve spent on payments. Buying a car is an investment. If you never replace the car, you’ll eventually pay it off and you won’t have any payments, which will give you hundreds in extra spending money each month.


On the flip side, leasing vs buying a car typically means smaller monthly payments. Additionally, the car’s depreciation isn’t your problem. However, when it comes time to trade vehicles, you simply hand the keys back over without any return on your investment (years of making payments).

Also, when leasing vehicles, you can choose to keep the car and pay it off. However, you’ll be much farther behind than if you just bought it in the first place.


An important factor to consider when trying to decide whether to buy or lease a vehicle is the level of commitment required by each option. While some people view financial commitments as risky, they can also have better payoffs.


If you choose to buy a Toyota, for example, that car is yours for good. If you decide you want a new or different car in the future, you’ll have to sell it or trade it in. However, you’ll be rewarded for your commitment because of the sell value or trade-in value.


On the other hand, vehicle lease agreements can be anywhere from 12-60 months. If you’re hesitant to commit to long-term payments, leasing a vehicle for only 12 months is a pretty safe bet.

Learning when to lease a vehicle and for how long is essential. This can be ideal if you’re only in town for a few years for work, are experimenting with a new location, etc. However, if you decide to terminate your lease agreement early, there will be fees.

Leasing Options

One of the best things about leasing a vehicle is that it provides you with more options. Because the monthly payments are so much lower than buying a car, it’s easier to get into brand new, higher-priced vehicles. For some people, leasing a new car is the only way they’d be able to drive a brand new luxury model.

For example, you could lease a Toyota for a few years until your contract is up. At that point, you could jump into another brand new Toyota. Leasing vs buying grants you access to different vehicle models that may not otherwise be available in your price range.


It’s important to understand and embrace the ultimate difference when you choose to buy or lease a car – ownership. At the end of the day, if you lease a car, it’s not yours. If you buy a car, it’s yours until you sell it.


There are limitations to leasing a car you are bound by to avoid extra charges and fees. For example, when you sign a lease contract, you agree to keep the vehicle’s mileage under a certain number. You could pay as much as 15 to 20 cents per mile over the limit.

Additionally, if you return the vehicle with “excessive” wear and tear, you’ll be held financially liable. This could include dents, scratches, stains, and tears. Talk to car dealers before signing any contracts to make sure you understand what you’re responsible for.


Alternatively, if you buy a car, you’re free to do what you want. You can put as many miles on it as you want. For that matter, you can put as many scratches on it as you want’ (though we don’t know why you would).

Additionally, if you want to make changes or customizations to the car, you can do so without fear of reprisal. You can change the rims, add decals, slap on bumper stickers, swap out the stereo system for something better, etc.

Are You Ready to Buy or Lease a Car?

If you’re ready to get into a new car, we hope our guide helped you come to a decision. And whether you want to buy or lease your next car, we can help.

Come down to our Toyota dealership in San Antonio or check out our specials online. And if you’re worried about getting approved for a loan, you can apply for in-house financing right now. Good luck, we hope to hear from you soon!

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