There is some division of opinion when it comes to car leases. Most people don’t particularly like them, but others absolutely swear by them. It’s often a matter of personal preference and individual circumstances more than anything else.

Why a lease might work for you

If you are looking for practical reasons why you might do better with a car lease than owning the vehicle outright, consider some of these:

You drive relatively few miles. Car cases typically come with mileage limitations. 12-15,000 miles is a typical limit, but they can be as low as 8,000. If you drive well within these limits, a car lease could work for you. There is little chance that you will exceed the miles and incur extra charges as a result.

You get the new car bug more frequently than most. If you like to buy new cars on a regular basis, leasing could be the better way to go. Since lease terms typically run between 24 and 60 months, you’ll have a built-in reason to get a new car every few years.

You can’t do car repairs of any sort. There are two considerations here. The first is that you’ll probably never be in a car lease long enough that the vehicle will require major repairs. The second is that car leasing companies generally prohibit performing your own repairs. Leasing contracts typically contain language that requires you to bring the car to a shop that is duly licensed, fully insured, and certified by whatever government agencies are required to do so.

The idea of a perpetual car payment doesn’t scare you. Some people can’t stomach the idea of a permanent car payment. But if that doesn’t bother you, a car lease is perfect. You’ll have a payment anytime you are in a lease, and you’ll need to be okay with this.

You have a business. Leases can be more income tax friendly for a business than purchases. You can generally deduct the entire amount of the lease payment, and you don’t have to get involved with breaking out interest charges or maintaining depreciation schedules. And since you probably want to keep a relatively late-model vehicle for business purposes, leasing will ensure that you do this.

Why a lease might be a bad idea

There are probably more compelling reasons to avoid a lease, at least for most people.

You drive more than the average number of miles. If you drive more than the number of miles that leases typically permit, you’ll be better off owning your car outright. Even if the lease comes with a lower monthly payment than a purchase, you can give back all of the savings and more by exceeding the allowable mileage.

You want to save money over the long run. No matter how you look at it, owning your car outright will be cheaper than leasing – at least in the long run. This is largely due the fact that you can pay off your car and not have a monthly payment for several years. With a lease, you always have a monthly payment.

You have a deep need to own your possessions. Some people are comfortable leasing whatever they need – others need to own. If you have a deep seated need to own the vehicle you’re driving, a lease will be out of the question.

You’re handy when it comes to repairs. Another major reason why owning a car is less expensive than leasing it is that you have more options when it comes to repairs. This is particularly true if you are able to do most or even many of your own repairs. And if you can, you can usually find less expensive replacement parts, including used car parts. This can result in many thousands of dollars saved over the life of the car.

You plan to own your car longer than five years. Just as there are people who like to change cars every few years, there are also people who like to continue driving the same vehicle, especially if it performs well. You can never know that your next car – even a brand-new one – will run as well as the one you have now.

If you are considering the buy-vs-lease question on a car, think about the considerations above before you do

Kevin Mercadante
Kevin Mercadante

Kevin Mercadante is professional personal finance blogger, and the owner of his own personal finance blog, He has backgrounds in both accounting and the mortgage industry. He lives in Atlanta with his wife and two teenage kids and can be followed on Twitter at @OutOfYourRut.