Should You Lease or Buy a New Car in 2024? 9 Pros and Cons
Those in the market for a new car have been debating this question for years: Is it better to buy or lease a new car? The answer to this question is different depending on a number of factors and can change over time. Both choices have pros and cons.
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If you’re considering buying or leasing a new car in 2024, here’s what you need to know.
Leasing a New Car in 2024
When you lease a car, you don’t own it. You make a monthly payment for a pre-determined amount of time — often three years — and at the end of that time, you have the option to purchase the vehicle or to return it to the dealership.
Here are the pros and cons to leasing a new car in 2024.
Leasing Pros
Leasing a vehicle lets you drive a brand-new car for a considerably lower monthly payment than you would have if you purchased it. Plus, you can get a new car, with the latest features and a warranty, every three years.
Dealers want you to lease, and leases have declined in recent years, so you may find advantageous deals on leases in 2024.
Leasing Cons
You don’t own the vehicle, so you have no equity in it. As a result, when you turn in a leased vehicle, you have no down payment for the next vehicle.
It’s also important to know that leases allow you to drive a prescribed number of miles over the lease period. The allotted mileage can be as low as 12,000 miles a year. If you drive more than you are allotted, you have to pay for each extra mile when you turn the car in. If you drive a lot, this can really add up.
Buying a New Car in 2024
When you buy a new car, you can either pay cash for it or finance it. When comparing buying to leasing, be sure to factor in all the applicable costs, particularly if you’re financing.
Here are the pros and cons to buying a new car in 2024.
Buying Pros
You can drive as much as you want when you own a car. You don’t have the mileage restriction that comes with a lease. If you drive more than 12,000 or 15,000 miles a year, buying may be your best bet.
When you buy, you can get exactly the options and features you want — without getting the ones you don’t. Lease vehicles, especially high-end models, may come with fancy features that you don’t really need but are already built into the price.
Buying Cons
New cars are expensive, and interest rates are high right now. While it’s possible to refinance a car loan if rates drop, the likelihood of rates dropping significantly over the term of your loan is slim.
In addition, new cars don’t hold their value, particularly in the short term. If you know you’re going to want another new car in a few years, you’ll probably lose money when you go to sell it or trade it in.
Making an informed decision about whether to buy or lease is important, and it’s best to make the decision before you set foot in the dealership. Dealers can be very persuasive, and they typically try to encourage customers to lease. Why? Because they know you’ll be going back to the same dealership in three years, and you’ll likely lease again. So, make up your mind before you head to the dealer, and stick to your decision.
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