Hi! Robert's points below are great. This Edmunds article presents a few more pros and cons.
Leasing tends to get a bad rap, but for people who LOVE cars and like to drive the newest and best, it can be a great option. You can often get "more car" for a lower monthly payment. It is try that can cost more in the long run than buying, but if cars are your "thing," the cost may be worth it.
It is better to buy the car outright most of the time, because leasing a car will net you more charges and issues than outright buying the car would. A few examples: leasing the car requires you to make payments, rather than actually owning the car (if you're not using a loan from a bank to buy the car). When you actually own the car, all you need to pay are the taxes on the car and the price for the car itself. And to point out another cost, it's extremely costly to have insurance on a leased car, whereas on a bought car your insurance payments will be significantly lowered. Also, you would be better off purchasing the car as leasing a car limits the amount of miles you can put on the car. Most leases average twelve thousand to twenty thousand miles, depending on the car type and how new it is, among a number of other factors. When you have bought the car, you don't have to worry about mileage, although if you don't maintain the car it obviously will lower in value. Also, if you have used a loan to buy a car outright, you will be paying back that loan and building credit and equity, whereas with a leased car and lease payments, you are not building any equity or credit since those payments do not get reported to credit institutions. If you lease a car, sure, you can just give it back at the end of the lease cycle and pay off any remaining balances, which is again extremely costly sometimes depending on how much you would have paid off. However, when purchasing a car you don't need to do this and you can proceed to even sell your car to someone else, or trade it in somewhere for cash towards a different car at a dealership somewhere.
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