Car buying and leasing

Should you lease vs. buy a car? Explore pros, cons, and alternatives

Should you lease or buy a car?

If you’ve ever considered buying a car, this question has probably crossed your mind. Or, if it hasn’t, someone at a car dealership may have surprised you with, “Are you interested in leasing or purchasing?”

This article has got all the details you need to make an informed decision, and not only about buying or leasing a car. It’ll also cover other options such as car rental and car subscription services to give you a better idea of all the choices you have available.

The different levels of car commitment

When it comes to committing to a car, you have several different options. From marriage-level car ownership to the casual commitment of a car subscription, this section breaks down all the different ways you can gain access to a vehicle and the level of responsibility each form of access entails.

Purchasing a car

Purchasing a car gives you full ownership of your vehicle of choice. It also gives you full responsibility. You’ll need to seek out financing for the car, register it, get insurance, and keep up with the maintenance schedule. If something goes wrong with the car, you’re responsible for fixing it and paying for the fix, which can be a little or a lot depending on your type of insurance and the severity of the issue.

Leasing a car

Leasing a car is definitely a commitment but a notably smaller one than buying a car. You can think of leasing as car engagement rather than car wedlock. You know you like the car enough that you want to drive it for a long time, but you still have the option of backing out.

Leasing a car is sometimes marketed as a form of car ownership. However, legally, you’re just borrowing the car from the dealership. Unless you extend the lease or commit to purchasing, you’ll have to return those wheels and the keys when your leasing term comes to an end.

Renting a car

Renting a car is typically done less out of a feeling of commitment and more out of a feeling of necessity. If you’ve ever traveled somewhere where your car wasn’t and you needed reliable, consistent access to a vehicle, you’ve likely rented (or at least thought about renting) a car.

It’s unlikely that anybody who’s ever rented a car has maintained the illusion that they own it, though. That’s probably because the rental agency makes you sign a lot of paperwork, and they sometimes worry you into purchasing expensive insurance (often on top of the insurance you already have). It comes with the convenience of being able to drive for a limited time without having long-term commitments, though.

Car subscriptions

New on the scene, car subscriptions are an easy and low-commitment way to get your hands on a vehicle. When you use Flexcar’s subscription service, you get to select from a variety of vehicles in Flexcar’s inventory, pick a convenient location and time for your date (i.e. vehicle pick up), and choose your commitment duration, whether it be a month, a season, or longer. Plus, insurance, maintenance, and roadside assistance costs are already included in the monthly payments, so there’s no need to stress if you get a flat or the engine starts making a mysterious noise. You’re already covered.

In addition to their simplicity, car subscriptions are appealing because of their flexibility. Indeed, Flexcar values flexibility so much, they put it right in the name. That’s because they understand that life, like dating, is rarely predictable. If you find that you and your car aren’t a good match, or if your Jeep Wrangler isn’t so cozy to ride in when the winter comes, Flexcar allows you to swap your car subscription out for one low fee of $99.

What’s more, Flexcar differs from traditional car leasing contracts because they offer unlimited flexibility when it comes to their mileage plans. Leases include very strict mileage limitations. Going over those mileage limits can result in hefty fees. But with Flexcar, you can upgrade or downgrade your mileage plan whenever you want without incurring fees. Have to commute farther for a temporary job? Or maybe you’re taking a semester of classes at a campus farther from home? No problem. Just increase your mileage plan when your mileage needs are higher and decrease it when you need to drive less. Easy peasy.

The main differences between leasing and buying

Commitment is a major factor in the ever-enduring lease vs. buy car contest. But there are two additional main differences to throw into the mix: ownership and cost.

You read a bit about vehicle ownership above, but to review, when you buy a car, you own it outright. Once you’ve paid down a sufficient portion of your loan, the car will become an asset that you can sell later on. When you lease a vehicle, the dealership owns it. When your leasing term is up, you must return it to the dealership. That means they can put restrictions on it, including how many miles you can drive before incurring fees, what kind of insurance you can have, and whether you can modify the vehicle.

Cost is also a significant difference between leasing and buying. In general, the short-term costs of leasing are less than those of purchasing. That means you’ll drive out of the dealership in a leased vehicle having spent less money that day than if you had purchased the same vehicle. Monthly payments on leased vehicles, too, are often less than if you had purchased the vehicle. That being said, the payments made on a purchased vehicle build equity, while the payments made on a lease do not.

If you liked the dating analogy above and are desperately seeking another useful comparison, you can think of the differences between leasing and buying as similar (on a smaller scale) to the differences between renting and mortgaging a home. When most people buy a home, they provide a down payment and then take out a mortgage from a bank to finance the remainder of the cost. Then, each month that they make their mortgage payment, they build equity (i.e. the value of their home after their liability — the amount they owe on it — has been subtracted).

When someone rents a home, they sign a lease for a specific period, put down a security deposit, and pay their landlord a set price for that home until the term of the lease is up. The upfront costs and monthly payments are often lower than if they had bought the home. But their rent is always, technically, a liability, albeit a short-term one.

Advantages of subscribing to a car

If buying or leasing a car sounds overly complicated, you’re not alone. It definitely can be. That’s why it’s Flexcar’s mission to provide a low-hassle alternative to car ownership. Here are some advantages subscribing to a car has over leasing or purchasing one.


Life is unpredictable. But that doesn’t mean it needs to be stressful. When it comes to unpredictability, sometimes the best coping strategy is flexibility. You can subscribe to a vehicle for a month, a semester, a season, or longer. You also have the power to modify your subscription plan at any time, ensuring that your plan fits your needs and not the other way around.


Did you feel all your stress melt away when you read those words? What a beautiful phrase “all-inclusive” is. Think of it like a tropical resort but with cars. When you Flexcar, you get it all: maintenance, insurance, and roadside assistance are included in one low monthly price. That even includes tires and oil changes.


Regardless of whether you buy or lease a car, you have to keep the same car for a predetermined length of time, typically two years or more. With a car subscription, you can not only choose from a wide variety of cars to drive, but you can swap out one car for another as often as you want. And with Flexcar, you get unlimited swaps.

Advantages of leasing a car

If you’re ready to make a larger commitment, there are definite advantages to leasing a vehicle. Here’s a list of the best ones.

Lower short-term costs

Upfront and month-to-month leases tend to have less of an impact on your monthly bank statements. And because the dealership will also include warranty coverage and maintenance services in the cost of the lease, there’s no need to fret when that engine oil maintenance light goes off every few months.

Nicer cars for less

Who doesn’t love paying less for more? With leases, you can get higher-end models of your desired car for less than if you purchased it. And because you can swap out your lease every couple of years, there’s no risk of watching your beautiful brand-new car age.

Easy Breakups

Luckily, when you want to break up with your lease, all you have to do is drive it back to the dealership and drop it off. Tears are totally optional.

Advantages of buying a car

If leasing is a good option for those looking to save in the short term, then buying is a better option for those looking to gain in the long term. There are important benefits when it comes to owning a car.

Full ownership

When you buy a car, you have full responsibility for it, which means you can make whatever customizations you want.


Without the mileage and customization restrictions of a lease, you can drive your car wherever you please and trick it out to your heart’s desire.


When your car crosses that financial threshold from liability to an asset, you can enjoy its equity.

Factors to consider when leasing or buying

Regardless of what you choose, buying or leasing a vehicle is a big decision. If it’s one you want to commit to, make sure you’ve considered the following factors before making the leap.


As with any large financial commitment, budget is a major factor that warrants consideration. To determine a down payment and monthly car payment that fits into your budget, check out one of the many lease vs. buy car calculators available online. They can give you an idea of much you’ll pay upfront and over time whether you’re leasing or financing a car.

Driving Habits

The amount you’ll drive and the demands you’ll put on your car should also be considerations. If you have a long daily commute or if you like taking long road trips every few months, a mileage-restricted lease might not be the best idea for you. But if you work from home or have a hybrid work schedule or if your daily commute is short, you’ll need to worry less about hitting the mileage max. Before you buy or lease, try to get a sense of how much or how little you’ll need to drive your car.

Maintenance and repair costs

Maintenance and repair costs are almost inevitable if you’re driving a car on the reg. It’s good to consider whether the maintenance and repair costs associated with owning a vehicle are manageable or if you would prefer the decreased responsibility of having those costs covered by your lease.

How to make the best decision for you

So you’ve considered all the major factors but still feel unsure about which decision would be best. In that case, more research might help. Here’s a list of things you can research and assess to help you make the most informed decision possible.

Calculate the total cost of ownership

You may have once typed “what is a lease” or “how to buy a car” into your favorite search engine and discovered articles that talked about maintenance, depreciation, down payments, acquisition fees, and insurance.

It’s definitely hard to get a clear sense of how much this all will cost you over the entire time you own or lease a car. To get that very informative number, we recommend you use a cost of ownership calculator online. Pro tip: Sometimes, with cars, this is also called a five-year cost calculator.

Make a pros and cons list

This activity is useful when making all kinds of decisions. It’s especially useful when considering whether or not to buy or lease a car. Write all the pros and cons you can think of, and then add up the pluses and minuses. When you’re done, you may have a better idea of which option is best for you.

Evaluate your current financial situation

When you’re thinking about buying or leasing, take a hard look at your bank account and your income to determine whether you’re ready to make this financial commitment.

Summary of leasing vs. buying a car

Whether you’re thinking of leasing or buying, it’s a big commitment, so make sure you do your research and know your budget. Understand that when you lease, there are often lower upfront costs and monthly payments, but those payments don’t contribute to car ownership. Know that when you buy, the higher cost of your down payment and monthly car payments mean that you are building equity and your car will eventually become an asset.

Final thoughts

If you’ve made it this far, you’re well on your way to making a well-informed decision about how to get yourself a set of wheels. Flexcar subscriptions can offer a quick, low-commitment, no-hassle way to get a car, so you can buy yourself some time while you consider buying or leasing a car.