Should I buy or lease my next car?

Old habits die hard. People that are accustomed to buying cars will usually continue to do so, while people that prefer car leases stick with that choice. Yet the right choice depends on a number of factors. 

The appeal of a lease is obvious: You get a shiny new car every three years (which is the length of most leases), not having to worry about the maintenance costs associated with older vehicles. Consumer Reports found that leasing especially makes sense with premium vehicles: "Automakers often discount the cost of leasing a luxury car to attract new buyers to a brand."

Moreover, auto technology is changing so fast that vehicles that are just a few years old may start to feel obsolete. I really enjoy my three year old electric car, but today's electric cars are already so much better, with longer driving range.  I wish I had leased my car back in 2021. 

Of course, the clear downside of leasing is that you'll have nothing to show for your spending once your lease is up. So, in the long run, buying is always cheaper than leasing. That's especially the case with gently used cars. I saved 40% by buying a three year old Honda Accord back in 2011 (compared to it's price when new). And 200,000 miles later, it's still largely repair-free. Another factor to consider: road warriors that rack up a lot of miles every year will save by owning their vehicle, as lease terms make it costly to put more than 10,000 to 12,000 miles on a car per year. 

If you are driving an older vehicle and starting to see rising repair bills, know that getting a newer (or new) car may make ample sense. Car makers no longer have a shortage of inventory, and are offering better prices than the recent past to "move the metal." In addition, financing costs have started to come down from recent peaks. 

I'll leave you with a final thought: electric cars merit serious consideration, beyond their obvious benefits to the environment. They are a joy to drive, many of them now go more than 300 miles between charges, and the number of EV chargers is growing at a rapid pace. I'm not sure it makes sense to only own an electric car--my Honda Accord is still helpful for long road trips. But in a two-car family, an electric car makes a lot of sense. Studies are showing that their maintenance costs will be far lower than gas-powered cars--over the life of the vehicle.