If you're in the market for a new vehicle, there are a lot of things to consider. Before you even think about color and options, you have to decide the type of car you want, whether you want a brand-new or used one, and - if you choose new - whether you want to buy or lease it. There are many reasons why people choose buying or leasing over the other choice, but which works out better will depend on your unique situation. Let's take a look at some of the pros and cons to both options.

Buying a Vehicle
Purchasing is the most straightforward way to acquire a vehicle, as well as the most common. If you have the cash on hand, you can pay for the vehicle (new or preowned) in full and avoid paying any interest like you'd have to if you financed it. Most people, though, will need to finance their vehicle's cost over several years, preferably with a decent down payment to reduce the amount that's financed. The biggest perk of going this route is that you actually own the vehicle, and it's yours to sell or trade in when you're ready to. You are also free to drive it as many miles as you like, whereas you'd have to stay under a mileage limit if you leased.

Leasing a Vehicle
Leasing is another popular option to acquire a vehicle, but there's a bit more that goes in to figuring out if it's the right choice for a particular car shopper. While it often works out to be less expensive than buying one outright, there are fees and potential penalties that a car purchaser doesn't have to face. Also, the vehicle is not the lessee's property; they have to return it at the end of the term.

Lease contracts typically last for two or three years, and they may or may not require a down payment (monthly payments will be lower with a down payment and higher without one). But the most limiting aspect of a lease is the mileage allowance. Lease contracts limit how many miles you are allowed to accrue over the term. Typically, a lease will be for 10,000 to 12,000 miles each year, with a cost penalty for each mile driven over the mileage limit. Lessees also have to take care not to damage the vehicle inside or out, since it will be assessed for condition at the end of the term. If the vehicle is found to be in below-average condition for its age, the lessee will be responsible for covering that devaluation when they return it.

Since lease contracts typically last two or three years, many people like to go this route and simply upgrade to a brand-new model at the end of their contract. It's the least expensive way to make sure you're never driving a car that's more than three years old. You also have the option to buy the vehicle at the end of the lease. Another benefit is that your repair costs will be quite low since the vehicle will be under a factory warranty. Of course, there are some cons to leasing a vehicle, including the potential extra charges mentioned above for condition and mileage overage. You may also have to pay a termination fee if you want to cancel your lease contract before the term ends.