Final answer:
Someone might choose to lease a car because it usually involves lower monthly payments than buying. However, leasing has mileage restrictions that may lead to extra charges, whereas buying offers ownership and can include extended warranty coverage.
Step-by-step explanation:
Choosing whether to lease or buy a car is an important economic decision that impacts your finances. One reason someone might prefer to lease a car is because leasing offers lower monthly payments compared to buying a car. When you lease, you typically pay a smaller down payment and enjoy lower monthly outlays. However, leasing comes with certain limitations, such as mileage caps, which could incur additional charges if you exceed them - usually set around 10,000 miles per year.
In contrast, buying a car gives you ownership and equity in the vehicle. While monthly payments may be higher when buying, you'll eventually own the car outright and won't face any mileage restrictions. Furthermore, buying a new car can include benefits like extended warranty coverage, which provides peace of mind by covering defects and repairs for a certain period. However, new cars can be significantly more expensive than used ones.
Whether leasing or buying, other factors to consider include the cost of insurance, which can vary due to the vehicle's safety rating, your driving history, and age amongst others. Ultimately, you should carefully consider your personal financial situation and driving needs before making a decision between leasing or buying a vehicle.