Leasing vs Buying
What should you do, lease or buy your car? That is going to depend on what is happening in your life that nudged you into looking to get a car. Is it your first car, growing family, tired of your old car, financial reasons, or is it time to finally get the car you’ve always dreamed about?
It depends is the answer to most questions about life decisions, and it applies with leasing vs buying. Before you decide on anything you must look at the facts, the pros and cons of both sides of the coin.
The Facts of the Matter
Buying means paying full price for the complete value of the car via cash or loan, no matter how long you have it, no matter how many miles you accrue, whether it is a new or used car.
Leasing means you are paying for part of the cars complete value which is the part that you use when you are behind the wheel, no matter how many miles you put on it. Leasing is not an option for used cars and only allowed for new vehicles.
When & How you Pay
With leasing making a downpayment is optional. However, in most states, sales tax are included in the monthly payments. Much like a loan interest, you pay a financial rate, aka the money factor. Additional fees and a security deposit may be required with a lease.
The first payment for the following month is due the moment you sign your lease contract and of course, the next payment is due the next month. When your lease is over you can return the car or buy it for the remainder of the value you have not paid yet. Refer to your lease contract for the purchase price.
When you buy car on a loan, a downpayment of 10%-20% is usually made with sales tax on the total price of the car. The interest rate depends on the lender and your credit score. The first payment is due the next month after the contract is signed. You can trade your car in or sell it. If you trade it in the trade will be for a car that is of lesser value than the purchase price, as you can see if you value your trade. If you sell it you will get significantly less than what you purchased if for. Once you drive it off the dealer lot the value depreciates.
Leasing Pros and Cons
The good thing about leasing is lower monthly payments vs the higher monthly payments of buying.
The leased car is always under warranty as long as you are driving vs having warranties on the car you buy. You can drive a brand new car every couple of years when you lease.
The good thing about buying is building equity as an owner and credit. You pay less in the long term to get the benefits of equity and credit. Owning your vehicle comes with a sense of accomplishment and commitment vs the free floating and unpredictable feel of a lease. If you buy your car you can hook it up to fit your lifestyle vs not being able to do anything custom to a leased vehicle because it does not belong to you.
Leasing vs Buying Let us Help
Still aren’t sure if leasing or buying is best for you? Let us at Friendly Dodge Chrysler Jeep RAM help you. Our sales associates understand that everyone has unique situations, needs, and wants when it comes to getting a car. Let us help you figure that out so you can make the choice that is best for you. Please give us a call to speak to one of our trusted sales associates at 844-568-3315 or schedule your visit today.