Differences Between Leasing & Buying a New Car
Hooray! You’ve decided to get a new car. You may even have your heart set on a certain make and model, but you just can’t decide whether to buy or lease your new car. When it comes to deciding whether to buy or lease, it’s best to consider the pros and cons of each option. Simply put, buying a car means it’s yours to do so as you please whereas leasing a car is similar to an extended rental. Leasing is like renting an apartment versus paying a mortgage for a home. Neither one is right or wrong, you’ll just need to decide which option works best for you, your finances, and your lifestyle.
Why You Should Consider a Lease
If you’re looking for a lower down payment and monthly payment, want the latest and greatest in technology, little to no maintenance costs, easy end terms, and reduced costs in sales tax, leasing might be the option for you. When you lease a vehicle, you pay only for the depreciation that occurs during the term of the lease; your monthly payments are also lower compared to the cost of financing a purchase of the vehicle. You may even save money on the sales tax for the vehicle. In some states, you are only taxed on the amount put down and the monthly payments. Though, in other states, you may need to pay taxes on the entire cost of the car, the same as a vehicle purchase. Additionally, when purchasing, you may only qualify financially for certain models because of the difference in price, however, with a lease, you may be able to choose an upgraded model with nicer features for the same monthly payment or less as if you were buying. A lease might also save you money up front. Some leases require zero money down at signing while a vehicle purchase may require a hefty down payment. Because lease terms are typically between 2 and 4 years, you may be able to upgrade to a new car every few years. At the end of the lease, you turn the car into the dealer, pay any closing fees, and leave. You won’t need to worry about selling or negotiating a trade-in value.
Some other advantages to a lease include:
- The latest in modern technology including upgraded safety features such as adaptive cruise control, brake and lane assist, and even semi-autonomous driving systems.
- Upgraded connectivity features including Wi-Fi and Bluetooth features that integrate with your mobile device.
- Better fuel economy when compared to similar models from just a few years ago.
- Coverage under the manufacturer’s warranty for the entirety of the lease which eliminates or significantly reduces the cost of repairs or maintenance.
Why You Should Consider Buying
If you’re looking for something to call your very own with no mileage restrictions, that may save (or earn) you some money, that is completely customizable to your tastes, and is easily obtainable, a vehicle purchase may be in your best interest. When you purchase a vehicle with no financing, you own the vehicle outright and can do with it as you please. If you’ve financed your vehicle, the lender retains the title until the loan is paid off. Luckily, as you pay each payment, you build a bit of equity when the payments outpace the rate of depreciation. However, lessees do not build equity in their vehicles. When you purchase a vehicle, you may also drive it as much or as little as you desire, as there are no mileage restrictions or penalty fees for driving over a certain number of miles as there would with a lease. If you commute a lot for your job or enjoy frequent road trips, buying is a much more economical choice than leasing. When you’re ready to sell your car, you can! With a lease, you’re locked into a period of possession and must keep the vehicle for the agreed upon time, or fees will apply. In addition to being able to sell the vehicle at your choosing, you can also use the vehicle as a down payment for your next vehicle, if it is paid off. If the vehicle is not paid off, the dealer will consider the difference between the pay-off value and the trade-in value. In either case, you may be able to reduce the down payment on your next vehicle.
Some other advantages to buying include:
- You can change the appearance of the vehicle by wrapping it, adding custom wheels or rims, or upgrade the interior or exterior lighting. Some changes may even increase the value of your car, which may provide a nice return on your investment when it comes time to selling the vehicle.
- Once it’s paid, it’s paid. Monthly payments end once the loan is paid off. If you decide to keep the vehicle longer than the financing period, you may enjoy months or years of monthly payment-free driving.
- Easier financing. Leases are often reserved for those with impeccable credit scores. Seldom are there leasing options for those with poor credit. Although car loans may cost more than a lease, car loans are easier to obtain for those with bad credit.
We’re Here Whether You Buy or Lease
If you decide to lease, finance, or pay for your vehicle in cash, Mac’s Auto Service will be here to help you care for your vehicle. From oil changes to flushes, we’re the center you can trust for all your automotive needs. It may be a tough choice deciding between a lease or purchase, but the decision is easy when choosing where to have your vehicle maintained or repaired. Our technicians are ASE Certified, utilize state-of-the-art equipment, and use only OEM or equivalent parts. Just have a question or two? We have the answers! Our friendly Service Consultants are available to answer any questions you may have about your vehicle. Find a location near you and give us a call today!