Should You Lease or Buy a Car?

Should You Lease or Buy a Car?

Foremost Insurance Blog | February 22, 2023 | Lease | Auto Insurance | Start A Quote Today!

You may be debating whether to lease or buy if you’re in the market for a new car. It’s considered one of the most significant decisions most people will ever make, so it is essential to take your time and consider both choices from all angles. To help you with this milestone, we will explore the pros and cons of leasing vs. buying a car.

What is a car lease?

Leasing a car is like renting a car for a long-term contractual period. You are locked into the deal for a certain number of months and a monthly payment. Instead of paying a loan and building equity like you would if you purchased a car, you are paying for the car’s estimated depreciation during your lease. [1]

Is there a difference between financing and obtaining a car lease?

The main difference between financing and leasing a car is the end result. When financing a car, you are borrowing money from a bank, finance company, or credit union to slowly purchase your car over a certain period of time. When leasing a car, you are paying for the right to use the vehicle for a defined amount of time and miles. The monthly payments on a lease are usually lower than the monthly payments if you bought the same car. When the lease ends, you must return the car unless the lease agreement lets you buy it. [2]

What happens after a car lease ends?

When your vehicle lease ends, you have three options. First, you can trade it in and replace your old lease with a new lease for a different car. If you don’t want to lease another vehicle or would rather buy your next vehicle, you can simply walk away. Finally, if you like the car you’ve been leasing, you can purchase it. The purchase price for the car will be listed in your lease agreement, so you can shop around and compare prices. As you near the end of your lease, you may start hearing from the dealership to find out how you want to proceed. Be sure to take your time to consider each option to find the right fit for you. [3]

Pros of a car lease

Lower monthly payments

A lease can ease the financial burden of monthly costs due to the smaller down payment compared with buying. This could mean opting for a more luxurious car than you could otherwise afford.

Worry-free maintenance

Many cars come with a warranty that lasts at least three years, so many of the repairs may be covered in a 3-year lease.

No resale concerns

Because you’re only leasing, simply return the car at the end of the lease. Keep in mind you may have end-of-lease fees, including those for abnormal wear and tear or additional mileage on the car.

Freedom to drive a new car every few years

When your lease is up, you can return your car and get another new one. By leasing, you get the latest advances in car technology every few years. [4]

Cons of a car lease

Mileage requirements

Most leases permit a certain amount of mileage on the car (typically 10,000 to 15,000 miles per year), and exceeding this mileage can result in fees.

Fees and other costs

While the monthly cost you pay for leasing a car is much lower, there are other fees that come with leasing a car. This includes fees for modifications to the car, excess wear and tear, an early termination fee if you terminate the lease early, an acquisition fee, and more.

Constant monthly payments

When your lease ends, you’ll need to start a new one, meaning you’ll always have a car payment. [4]

If you like always driving the latest models or don’t have the credit or money to buy a new car, leasing may be a smart option.

Pros of buying a car


Whenever you have paid off your loan, the car is yours outright. You have the option to continue driving the car until it wears out, sell it to someone, or trade it into a car dealership for credit on another purchase.

Freedom to customize

You have complete control over how you improve or modify your car.

No restrictions

Unlike leasing a car, you’re not on the hook for excessive mileage or abnormal wear and tear fees. Because you own it, you pay for services and repairs on your timeline. [4]

Cons of buying a car vs a lease

Higher monthly payments

If you lease your car, the monthly payments will typically be lower than new car payments for the same vehicle.

Rapid depreciation

New cars can lose 15% to 25% of their value in the first five years of ownership. [4]

Large down payment

If you want better odds of getting approved for a loan, you might want to offer a larger down payment. For example, a 20% down payment for a $25,000 car would be about $5,000. Leasing your vehicle would allow you to keep at least some of that upfront cash.

If you plan to keep your car for a long time, modify it or drive a lot of miles, it makes more sense to buy.

Things to consider when car shopping

Before deciding whether to buy or lease a new or used car, make sure to do your research, especially if it’s your first time buying a car. Some things to consider are your budget, each car’s safety features, maintenance costs, and more.

What documents do I need to lease or buy a car?

When you go to the dealership to buy or lease a vehicle, here are the suggested documents to bring:

1. Valid driver’s license

2. Proof of residency (utility bill, bank statement, etc.)

3. Proof of income (pay stub) [5]

After considering all the pros and cons of buying or leasing a car and coming to your decision, don’t forget about insuring your vehicle with Shield Insurance.


[1] “Car Leasing Guide: How to Lease a Vehicle,” Kelley Blue Book, (July 8, 2022).

[2] “Financing or Leasing a Car,” (July, 2022).

[3] “The basics of a car lease agreement,” (Oct. 13, 2022).

[4] “Pros and Cons of Leasing or Buying a Car,” (Aug. 9, 2022).

[5] “What Documents Should I Have on Hand When Leasing a Car?” (accessed Dec. 15, 2022).


The information included here is designed for informational purposes only. It is not legal, tax, financial or any other sort of advice, nor is it a substitute for such advice. The information may not apply to your specific situation. We have tried to make sure the information is accurate, but it could be outdated or even inaccurate in parts. It is the reader’s responsibility to comply with any applicable local, state, or federal regulations. Nationwide Mutual Insurance Company, its affiliates, and their employees make no warranties about the information nor guarantee of results, and they assume no liability in connection with the information provided. Nationwide and the Nationwide N and Eagle are service marks of Nationwide Mutual Insurance Company. © 2022 Nationwide and Shield Insurance Agency.

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Shield Insurance Blog | DIFS | Auto Insurance | Start A Quote Today!

DIFS Drivers who rely on health insurance to pay for auto injuries may be responsible for their own medical bills if they lose or change their health insurance

Media Contact: Laura Hall, 517-290-3779,
Consumer Hotline: 833-ASK-DIFS,

From: DIFS Michigan Department of Insurance and Financial Services


(LANSING, MICH) The Michigan Department of Insurance and Financial Services (DIFS) is reminding Michiganders that if someone in their household does not have Personal Injury Protection (PIP) medical coverage, a change in their health insurance can also affect their auto insurance coverage. Under Michigan’s auto insurance law that went into effect in 2020, eligible Michiganders may now choose to opt out of or exclude themselves or family members from PIP medical, but they must take quick action after a change in health insurance or they risk not having medical coverage in the event of an auto accident.

“Your auto insurance may not be the first thing that comes to mind if you lose your health insurance, but Michiganders may now rely on their health insurance coverage for auto accident injuries and they must take quick action to protect themselves and their families after a change,” said DIFS Director Anita Fox. “There can be serious financial consequences if someone in your household does not have PIP medical coverage, loses their qualified health coverage, and is then injured in an auto accident without taking the appropriate action.”

Michigan’s auto insurance law now gives Michigan drivers the chance to choose from six different PIP medical coverage levels when they buy or renew their auto insurance. PIP covers medical bills and other expenses for those who are injured in an auto accident.

For people who have Qualified Health Coverage (QHC), two options allow them to remove PIP medical coverage for themselves and/or eligible household members. To count as QHC, the driver’s health insurance policy must not exclude or limit coverage for auto accident injuries and must have an individual deductible of $6,000 or less. Medicare Parts A and B or Medicare Advantage also count as QHC, but VA Health Benefits do not.

If a person who has been excluded from PIP has a change in their health coverage, they may have no medical coverage in the event of an auto accident. To prevent this from happening, DIFS is urging Michiganders who have a health insurance change in their household to A.C.T.:

  • A – Ask your auto insurance company or agent about your PIP medical coverage choice and find out if you need QHC to maintain your current selection.
  • C – Contact your health insurer to determine if your new policy counts as QHC and to get an updated QHC letter.
  • T -Tell your auto insurance company immediately if you lose your QHC. You have 30 days to obtain replacement health insurance or make a different PIP medical selection, or you risk not having medical coverage for yourself and your family in the event of a crash.

Drivers who do not secure replacement PIP medical coverage or QHC will not be entitled to any PIP medical benefits after 30 days, potentially making them personally responsible for their own medical bills in the event of an auto accident.

The mission of the Michigan Department of Insurance and Financial Services is to ensure access to safe and secure insurance and financial services fundamental for the opportunity, security, and success of Michigan residents, while fostering economic growth and sustainability in both industries. In addition, the Department provides consumer protection, outreach, and financial literacy and education services to Michigan residents. For more information, visit or follow the Department on FacebookTwitter, or LinkedIn.

Consumers with questions about auto insurance can contact DIFS Monday through Friday from 8 a.m. to 5 p.m. at 833-ASK-DIFS (833-275-3437) or visit


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Every week, Shield Insurance Agency draws a winner of a local gift card from its clients and social media followers.

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Shield Insurance Agency has given away thousands of dollars in local gift cards over the last 20 years serving Michigan.

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Shield Insurance Agency has been in business for so many years, we can shop a lot of different companies for a lot of different types of insurance to be sure you get what you need for the price you can afford. Check out the list!


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Shield Insurance Agency Blog

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June 17, 2021 

Contact: ernor

Gov. Whitmer Announces State will Open to Full Capacity on June 22 

More than nine million vaccines administered as new COVID cases fall to one-year low. 

LANSING, Mich. – Governor Gretchen Whitmer today accelerated the end of all COVID-19 epidemic orders on gatherings and masking as COVID-19 cases continue to plummet following increased vaccinations. Beginning June 22, capacity in both indoor and outdoor settings will increase to 100% and the state will no longer require residents to wear a face mask. 

“Today is a day that we have all been looking forward to, as we can safely get back to normal day-to-day activities and put this pandemic behind us,” said Governor Whitmer. “We owe a tremendous debt of gratitude to the medical experts and health professionals who stood on the front lines to keep us all safe. And we are incredibly thankful to all of the essential workers who kept our state moving. Thanks to the millions of Michiganders who rolled up their sleeves to get the safe, effective COVID-19 vaccine, we have been able to make these changes ahead of schedule. Our top priority going forward is utilizing the federal relief funding in a smart, sustainable way as we put Michigan back to work and jumpstart our economy. We have a once-in-a-lifetime opportunity to ensure that Michigan’s families, small businesses, and communities emerge from this pandemic stronger than ever before.” 

Nearly five million Michiganders ages 16 and older have received their first vaccine dose, according to Centers for Disease Control and Prevention data. According to data from the Michigan Care Improvement Registry, half of Michigan residents have completed their vaccination and over 60% have gotten their first shots. 

“This is great news and a day all of us have been looking forward to for more than a year,” said Elizabeth Hertel, Michigan Department of Health and Human Services director. “We have said all along that the vaccine would help us return to a sense of normalcy and today we announce that day is here.” 

Case rates, percent positivity and hospitalizations have all plummeted over the past several weeks. Currently, Michigan is experiencing 24.3 cases per million and has recorded a 1.9% positivity rate over the last seven days. 

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The Business Excellence Award is given to companies that have demonstrated outstanding performance, innovation, and leadership in their respective industries. It recognizes organizations that have achieved significant growth, maintained high ethical standards, and made a positive impact on their communities.

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How credit affects auto insurance: Rates could increase up to 72%

Kacie Goff /October 15, 2020

Article Highlights

Before offering you a policy, insurance providers analyze your risk profile by looking at things like your driving history, as well as personal details, such as age or marital status. This evaluation is used in determining your premium. 

But there’s another somewhat surprising factor that affects your premiums in all but three states: your credit score. Unless you live in California, Massachusetts, or Hawaii, expect your credit score to affect how much you pay to insure your car, at least to some degree. 

You may already be familiar with your credit score as determined by the three major credit bureaus, TransUnion, Experian, and Equifax, it’s important to know that insurers assign you an insurance credit score that varies from your traditional credit score. While your credit score plays a role in that insurance score, additional factors are also involved.

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Can credit scores be evaluated for auto insurance rates?

Short answer: yes, in most states. California, Massachusetts, and Hawaii are the exceptions here.

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Let’s look closer at why credit affects car insurance rates. Studies, including a Congress report by the Federal Trade Commission, have shown that a lower score means you’re a higher risk for your insurer. A poor score directly correlates to an increased risk of filing a claim. 

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