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ABA Family Legal Guide

Automobiles

Buying, Renting, and Leasing a Car

Car Leasing and Renting

Is it better to lease a car or buy a car?

Whether it is better to lease or buy a car depends on many factors, such as the following:

  • A car lease should mean lower monthly payments. Your installment payment for a leased car depends on the purchase price minus the car's estimated value at the end of the lease term. If you're buying a car, on the other hand, your installment payment will depend on the full value of the car.
  • Leasing usually avoids a down payment and sales tax. There also may be tax advantages if you lease mainly for business use.
  • On the other hand, a leased car does not give you any equity. Buying a car on credit does.
  • When your lease is up, you must return the car.
    • American Bar Association Family Legal Guide
    Copyright © 2004 American Bar Association
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