Buying vs. Leasing
Comparing the two major finance choicesMaking The Right Choice
When it comes to buying or leasing a car the options can be confusing. To help you make an informed decision we have provided the information below. We hope you find it informative and useful.
When you buy a new or used car you pay for the entire cost of the vehicle. When you lease a new or used car, you pay for only a portion of the vehicle's cost, which is the part you use during the time you are driving it.
Buying
Whether you pay for the car with cash, or finance it and make monthly payments, either way it’s yours. Of course, if you’re financing it, you’ll have to meet the obligations the lender requires, such as a certain down payment amount and timely monthly payments. If you don’t, they have the right to repossess it.
If you’re financing the vehicle, the bank will probably request a down payment. You can also trade-in another vehicle and use any equity towards your down payment. The amount of the down payment is usually based on the lender’s requirements and your credit score.
Your vehicle will be worth whatever you can sell it for in the future, and that depends on how well you maintain it. Be smart and protect your investment with regular scheduled maintenance by a factory-authorized facility.
Once you’ve paid off what you owe on your contract, the vehicle is 100% yours. The lending institution will send you a Lien Release as proof that the vehicle is completely paid off.
Leasing
You do not own a car when you lease it. You are paying for the use of the vehicle, but the finance institution that you leased it through actually owns it. This is usually why you pay less per month in a lease than if you were to buy the car.
Leases often do not require any type of a down payment. All you usually have to pay is the first month’s payment, a security deposit, the acquisition fee and other fees and taxes. But, as with a purchase, if you want to lower your monthly payments you can always pay more upfront.
In most leases you don’t end up owning the vehicle so you don’t end up selling it. That’s the financial institution’s job. You most likely will have mileage limits and wear and tear guidelines that, if you exceed them, could cost you extra money when you turn your vehicle back in.
Most people return the vehicle at the end of the lease term. But some like to purchase their vehicle during or at the end of their lease. Others like to trade it in before their lease is over. Just ask us about these different options before signing any paperwork and we’ll make sure you have your lease set up the way you want it.
Best Cars to Lease
The best cars to lease are those with the best book value after the term of the lease. Since they depreciate less, you pay less. Review the lease ratings to see which cars retain their value.