When looking for a new car, you have a few ways to get one, with leasing and buying being the main choices. So which one is the better option? The answer is that it depends, since both have pros and cons. Here’s a look at the advantages and disadvantages to consider when deciding whether to buy or lease a car.

The Pros and Cons of Buying a Car

Buying a car has numerous advantages. For example, one of the main benefits of buying is that once the car loan is paid in full, the buyer owns the car. This means they can either enjoy the car for years without making monthly payments anymore or sell the vehicle and keep the entire amount of the sale. Plus, the car’s owner has the option to drive as many miles as desired on the car without penalty, or modify the car at any time—giving them the option to swap out engine parts or repaint it.

Car owners can expect to pay a little more upfront before reaping these rewards. Buying a car often requires a down payment, which can be thousands of dollars. There’s also usually interest on the car loan, and of course, there’s no telling how much the car will be worth after years of payments. It’s possible it will be worth less than the amount still owed on the loan. Finally, most car warranties only last a few years, which means they tend to run out before the owner sells the car—leaving him or her responsible for the cost of repairs during the life of the vehicle.

The Pros and Cons of Leasing a Car

After looking at some of the downsides of buying a car, some people might think about leasing. After all, leasing typically requires a low down payment, which means it can be cheaper upfront than buying a car. Payments are usually low enough to be attractive to people in the market for a new car, with an emphasis on “new,” since leasing makes it easy for people to get a brand new car every couple of years. People who lease can simply wait for the contract to expire and then lease another new car, so they don’t even have to sell their old vehicle first like they would if they had purchased one. And thanks to the fact that the warranty is good for the whole lease term, repairs should be covered.

On the other hand, leasing a car means that the person who leases it is a lessee—not an owner. This means they can’t make improvements to the car, and they can’t drive it more than the agreed-upon miles or they will have to pay a fee. And since lessees’ monthly payments are going toward the lease, not a bank loan, they don’t own the car at the end of the lease term—which means they can’t sell it or use it as a trade-in to buy a car.

Anyone who wants a new car should consider these pros and cons before deciding whether to buy or lease. If it turns out buying is the best option for you, the next step should be applying for a car loan at a Velocity Community Credit Union for a chance to get the best interest rate.

Sources: Credit Carma, Good Financial Cents, US News