How do I decide whether to buy or lease?

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The following table presents a brief comparison of buying and leasing a car.  In general, leasing is for those who want a brand new model every few years and can afford the extra cost that comes with that luxury.  For most college students, buying a reliable used car is the way to go.

 BuyingLeasing
TimingWill save you money in the long term if you don’t care about getting a new car every few yearsNew car every 3-5 years; less hassle and comparable cost if you would be buying a brand new car every few years anyway
CostBuying a reliable used car will get you the most for your money; buying a new car will also save you money compared to leasingMore expensive than buying a brand new car and keeping it for 5+ years, and far more expensive than buying a reliable used car
EquityEven though your monthly payments are likely higher than leasing, you will be paying down your loan and able to recoup some money when you sellNothing to your name at the end of the lease period, although dealerships will often offer you a discounted purchase price
MileageNo extra costsPenalty for exceeding mileage limit (10,000 - 15,000 miles/year)
Repairs & MaintenanceFrequency and costs will likely increase as your car gets olderLess hassle since you’ll have a new car every few years