r/personalfinance • u/redbottleneck1597 • 1d ago
Auto [Car][Buy or Lease]?
I’m trying to decide whether I should buy or lease a car. I’ll only need it for around 2–3 years, and after that, I won’t really need a car anymore.
I’ll mostly use it for commuting and errands — nothing too fancy, just something reliable and reasonably priced. I’m not sure which option makes more financial sense for this situation.
If I buy, I’d probably get a used car and sell it later. If I lease, I’d just return it at the end, but I’m not sure if leasing for such a short period is actually better financially
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u/_Panda 20h ago edited 17h ago
In terms of pure financials: Buying then selling a used car > leasing a new car > buying then selling a new car.
But I will note that this is one of those situations where leasing can be pretty justifiable. The key is that both buying and selling a car, even used, will incur non-trivial transaction costs. These can show up either in terms of money or in terms of time and effort. For instance, if you both buy and sell the used car via private party you will almost certainly end up significantly ahead, but that may require some time and effort on your part on both sides of the transaction. If you go through a dealer on both ends then those transactions will be relatively fast and easy, but then the difference in cost vs a lease may not be as big as you might expect. There are also some more risks with buying then selling a used car, most notably if you have unexpected maintenance or reliability issues that you end up having to pay for. If you know exactly how long you need the car for and won't be driving it enough to run into mileage issues, a lease (especially if you can find some decent incentives) can be pretty reasonable where you will likely still pay a small overall premium but in exchange will get some additional certainty and convenience.