Leasing vs. buying – how to solve the eternal car shopping dilemma


10th Feb 2022 Motoring

Leasing vs. buying – how to solve the eternal car shopping dilemma

If you’ve ever been in the market for a new car, you’re surely familiar with the long-standing dilemma of buying versus leasing.

Considering that getting a new pair of wheels implies quite a big investment, no matter which route you take, it’s important to weigh your options carefully before you make a decision. And as with any other purchase, there’s no one-size-fits-all solution when it comes to car shopping. If for some people or companies leasing a car makes the most sense, for others, buying a new vehicle is the best course of action. The truth is both leasing and buying have their pros and their cons.

However, if you’re on your first car shopping experience and your knowledge in the automotive field is relatively limited, you might find it difficult to analyze all the variables on your own and figure out which is the right option for you. Fortunately, you can use this guide to shed some light on the issue and make a more informed decision.

Current automotive retail trends

Observing industry trends can ease the decision-making process by offering insights into consumer demands and behavior. If for a long time, buying a car was seen as the more advantageous option because it ensured ownership of the vehicle at the end of the loan term. However, in recent years leasing gained significant ground, not only due to the lower monthly payments but also because of the wide variety of cars available for lease.

Leasing was once associated with luxury cars, but with more vehicles entering the leasing market, consumers right now can choose from a broad range of cars. As specialists at economyleasing.co.uk explain, personal car leasing has become a popular choice over traditional vehicle purchasing, allowing people to save a considerable amount of money and get all the perks of a brand-new car at a fraction of the price.

Leasing is also a lot more attractive to dealers since it helps them make a bigger profit than a traditional car purchase. At the end of the lease contract, the vehicle goes back to the dealership and it can enter the used car market, bringing in additional profit when it’s resold. This also gives the dealer the chance to pitch a new lease, not to mention that lease deals are also a lot easier to sell since the buyer only pays for part of the car, not its total cost.

Considering all these aspects, it’s no surprise that leasing experienced such a big surge in popularity, with the global car leasing market expected to reach USD 123.87 billion by 2028.

Differences to take into account

But since each car shopping journey is unique, making a wise decision usually comes down to understanding the main differences between leasing and buying. So, here are the most important aspects to take into account.

Ownership of the vehicle

When you buy a car, you become the owner of the vehicle, so you can either keep it or sell it as you see fit. With leasing, you don’t actually own the car, but you can use it for a specified period of time since this is basically a long-term vehicle rental agreement. At the end of the lease, you’ll have to take it back to the dealership.

Up-front costs

Apart from downpayment, you’ll also have to factor in sales tax and registration fees when calculating the cost of buying a car. When it comes to leasing, things look a bit different cost-wise. You’ll have to make an initial payment, pay a security deposit, acquisition and registration taxes, and other fees.

Monthly payments

If you decide to finance your car purchase, the monthly payments for your brand-new vehicle will usually be higher than lease payments, and you’ll also have to pay fees and taxes for it. Since leasing only implies paying for vehicle use over a period of time, monthly payments will be a lot lower, to which you have to add interest, fees, and taxes as well.

Early termination of the contract

As a car owner, you’re free to sell or trade-in your vehicle any time you want, if you decide it’s time to make a change. The same cannot be said about leasing. If you want to end the leasing contract earlier than stipulated, get ready to deal with some costly charges. Sometimes the charges for early termination can be so high that it’s a lot more cost-effective to wait until the end of the term.  


When you own a car, you’re free to use your car as often as you want since there are no milage requirements to limit you. However, keep in mind that mileage is a factor that influences car depreciation. Leasing, on the other hand, involves specific mileage limitations, and if you decide to go over the imposed limit, you’ll have to pay penalties.

Wear and tear

The way you use and maintain your car when you own it is strictly your concern, and you don’t have to answer to anyone for the wear and tear that occurs with usage. But when you lease a car, any damage that is beyond normal wear and tear may lead to additional charges.

End of term

At the end of the loan term, you are free of the burden of making monthly payments and you get to either keep the car use the equity you’ve built to finance your next purchase. when the lease period ends, you’ll have various options: buy the car you’ve leased, lease another vehicle or look for a different car to purchase.

Car alterations

Owning a car means you get to do every alteration and modification you want, as long as they are legal and they don’t interfere with your warranty. Leasing stops you from making changes to the vehicle since you’ll have to return it in its original condition at the end of the lease agreement.

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