Should I Lease or Buy A Car?
There are two main ways to get a vehicle, buying and leasing. When you buy a car, truck or SUV, your payment options will either be cash or financing. Most car buyers are usually looking for a payment that they can afford comfortably. This can be achieved by several finance options provided by the lending institutions the car dealerships work with. Leasing a car, on the other hand will tend to provide a lower payment compared to buying although most manufacturers will offer payments based on approved credit. Generally, when you have good credit, car ownership is one of the major factors considered for a good deal! Whether you like driving a new car every two to three years or prefer driving one car for many years, the following are leasing vs buying a car pros and cons.
How Do Car Leases Work?
Leasing offers consumers the luxury of trading up for a new car based on the lease duration with upgrades to the latest safety, design, and technology features. The price of a vehicle on a lease is based on the selling price and “ residual value” (expected value at the end of lease). Essentially, you pay for the vehicle’s depreciation over the duration of the lease. Every new car lease offer will have a down payment amount (zero or a specified amount), monthly payment and the lease duration. Always read through the lease disclaimers to get a full overview of the lease terms.
Benefits of Leasing A Car
- Vehicle’s factory warranty guarantees lower repair costs.
- A new vehicle with latest upgrades every two to three years.
- Low monthly payments with a low or no down payment
- Paying less sales tax.
- No hassle on selling your trade-in.
Disadvantages of Leasing A Car
- At lease end, you do not own the vehicle (options to buy available).
- Limited mileage per year (options to purchase extra mileage).
- Early lease terminations are costly.
- You get charged for excessive wear-and-tear/driving over mileage limit.
- No equity in the car when you return it. In the long run, it will cost more to lease than buy for long-term.
Benefits of Buying A Car
- No mileage restrictions.
- After you pay off the car, you will only pay for fuel, insurance, and maintenance.
- No charges for excessive wear-and-tear.
- You save money over the long term.
- You can use your vehicle as a trade-in.
Disadvantages of Buying A Car
- To avoid owing more than the car’s worth, you will have to pay a higher down payment.
- Higher monthly payments compared to leasing.
- After factory warranty expiration, you will be responsible for repair costs.
- You can be “upside-down” when you try to sell or trade-in due to depreciation and market value.
- Possible hassles when you try to sell or trade-in.
Ready to Lease or Buy A New Vehicle?
Regardless of the option you choose, Larry H. Miller Dealerships stand by our motto “Driven By You”. We have professional sales representatives who will guide you on the pros and cons of leasing and buying so that you can make the right choice and get the vehicle that suits you! View our inventory below or fill the contact form and we will have our dedicated auto specialists reach out to you as soon as possible.