Should You Lease or Buy a Car

If you’re in the market for a new or used vehicle, how do you figure out if you should lease or buy?

“Look at your driving history,” says Tarry Shebesta, president of Automobile Consumer Services, Inc. Tarry’s company includes Web sites,, and Tarry is also the former president of the National Vehicle Leasing Association.

“How many years did you have a car payment?” Shebesta says. “If the answer is most years or all years, then you’re a perfect leasing candidate. If you always have a car payment, you should consider leasing because generally, a lease payment would be lower and you don’t have to take the risk.”

Taking risk refers to the risk of being stuck with a car that has rapidly depreciated in value if you buy, versus simply turning the car back in at the end of your lease, no matter how low the value has dropped.

Many SUV and truck owners are going through this right now. They are finding that when they go to trade in their mammoth SUV, the value is so low that it isn’t worth it. When you lease, the risk lies with the dealer and manufacturer.

Tarry Shebesta

“An advantage of leasing is that you’re not stuck with a low-value vehicle at the end of your lease,” Shebesta (pictured) says. “You don’t want to be the one taking the risk.”

He also says that leasing helps curb impulse purchases. Some buyers just get the impulse sometimes to drive into a dealership and get a new vehicle that day, for whatever reason.

“You know exactly when your lease will end and when you’ll have to start looking for another car,” Shebesta explains.

Some people shouldn’t lease a vehicle though. Those who would be getting in over their head with their monthly lease payment obviously shouldn’t lease.

“Leasing in general has always required a higher credit score,” Shebesta says. “Your score should be prime or near prime. Generally, a score of 680 and higher is average to lease a vehicle with most banks.”

With regular financing, consumers have to deal with more repairs the older the vehicle gets. With leasing, the consumer just turns the car back in at the end of the lease term.

How long should consumers lease a vehicle? What’s a good length of time? Shebesta recommends leasing a vehicle for as long as you would normally keep a car you buy.

Automotive finance companies are starting to ramp up leasing again. So if you’re a fan of leasing or if you think a lease is right for you, be prepared to put a couple thousand dollars down and you’ll be able to get a new vehicle with affordable monthly payments to fit your budget.