We’re happy we can help you come to a decision in your future car, truck or SUV purchase. When choosing between buying or leasing, there are a few things to consider: lifestyle, budget, and vehicle needs. Below you will find our pros and cons for each:
- Lower Monthly Payments. For leasing, you are paying the leasing fees and the depreciation that is happening during the lease term. For example, if you want to lease a 2017 Toyota Camry for three years then you will only pay for the depreciation of that vehicle for that period. If you decide to buy that same car and choose to finance, then the loan is based on the cost of the vehicle, minus your down payment and trade-in (if you have one). Unless you have a large down payment, leasing monthly payments tend to be less.
- Drive a new car every few years. Who wouldn’t want to be riding around town in a new car? With leasing, you simply turn in the car when your lease is up and find a new one, given you followed maintenance and mileage protocol. Leasing is perfect for people who enjoy new technology and safety features in their rides.
- Serious mileage constraints. Most lease terms come with an estimated 9,000-15,000 mileage limit, meaning if you go over on mileage then you could be paying $0.20 every additional mile traveled. This may not sound significant but if you commute 40 miles round trip then you’re paying an additional $8 a day. If you’re leaning towards a lease then it’s important to calculate how many miles you use daily.
- Vehicle Condition. The car has to be returned in its original condition. Luckily, the leased vehicle is usually under warranty so in case a repair needs to be made then you’re most likely covered. On the other hand, oil changes and other costs for maintaining the vehicle will still need to be done.
- Credit Score. If you don’t have a good credit score then leasing may not be for you, however, options are still available! Consider waiting to increase your credit score, taking over someone else’s lease or search for a certified used car with a comparable payment.
- Ownership. Once you pay off financing, the car is yours forever. Being able to take the car payment off your monthly budget is a satisfying feeling and you have the freedom to use it as a trade-in or even sell once it’s paid off.
- No Mileage Restrictions. Unlike leasing, you can drive your vehicle as much as you want without worrying about overage fees. For the commuter or the road trip enthusiast, buying a car would be for you.
- Cheaper. Tends to be cheaper than leasing in the long run. If you think about it, you will always have a monthly payment when you lease so buying is perfect for someone who wants a car long term.
- Depreciation. Once you drive off the lot, your car starts depreciating. In most instances, the value of your new car drops by about 20%. However, several vehicles exist that have a high resale value like the Honda Civic, BMW 3-Series, Ford Mustang, Toyota Tacoma, and Jeep Wrangler.
- Down Payment. Most dealers require a 10 to 20% down payment. For example, if you want to buy a $25,000 car, then expect to pay from $2,500 to $5,000 when you sign. Having that much cash in hand isn’t available for many, which is why leasing can be an attractive option.
- Length of Your Loan. Depending on your budget, you could end up with a mortgage size car loan. If you want a lower monthly payment then you will end up with a longer-term and higher loan interest rate. Dealers define longer-term loans that are longer than 72 months a higher risk and will charge you a higher interest rate as a result.
Be sure to weigh all the pros and cons of buying and leasing before you make a decision. Whether you choose to buy or lease a vehicle, we’re positive you will find a great deal! Let us help you get there by searching our inventory of new vehicles from dealerships in your area.