Should You Buy or Lease Your Car?

Karen Riccio

Disclosures

September 13, 2017

In This Article

What Makes More Financial Sense?

In any doctor-designated area of a medical office parking lot, you're likely to see a wide range of cars—from the most expensive and luxurious sedans to fancy sports coupes and SUVs, to subcompacts and electric. Some are old; some new.

As you probably know, just because most physicians earn six-figure salaries doesn't mean they should, or even want, to spend their hard-earned money on an expensive car with all the bells and whistles. That's especially true for physicians early in their careers, with huge student loan debt and new mortgage payments.

In fact, according to a study done by researchers at Experian Automotive and published in Forbes,[1] 61% of wealthy people actually drive Honda Accords and Toyota Camrys. "Wealthy," as defined by the Internal Revenue Service, refers to anyone making more than $250,000—that's just 2% of US households.

For the rich with richer tastes, the top 10 cars include the Mercedes E-class, the Lexus RX 350, and the BMW 3 and 5 series. For what it's worth, consumer advocate Dave Ramsey suggests that the cost of your car should not exceed 50% of your gross annual income. That's good advice for average Joes making average wages, but even a well-paid doctor can reach that 50% rather quickly.

Regardless of what you want from a car—practicality, speed, luxury, or cost-efficiency—or how much you can personally afford, the million-dollar question is always: Should I buy or lease? It's the question that more and more people are asking.

There are staunch supporters and critics of both options, but the best one is ultimately which makes the most sense for you.

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