When it comes time to getting a new vehicle, there is a lot that needs to be thought about. Something that is probably going through your mind is whether buying or leasing a new vehicle is the right option for you. While most people tend to buy, there are pros and cons to both options. Take a look at the information provided below to help guide your decision.
Pros of Leasing
When you lease a car, the monthly payments you make are simply the depreciation of the vehicle, which allows for cheaper monthly payments, one reason that most lessees choose this option. When you buy a car, you are paying for the full amount of the vehicle, whereas, with a lease, you only pay a percentage of that amount, depending on what the car is deemed to be worth at the end of the lease. Another pro with this option is that most leases are three-years long, which means after that period of time is up, you’re looking to step into a brand new car with updated features and technology. However, this is not your only option when the lease is over. You also have the option to buy out the lease, which means that you would now owe monthly payments on the remainder of the vehicle’s price. One more pro to leasing is that three years is typically a new car’s bumper-to-bumper warranty, which means that the car is covered for repairs under the warranty for the duration of the lease.
Cons to Leasing
The biggest drawback to leasing a car is that many people think of this option as just renting the car. You make monthly payments, but get no equity out of the deal, so at the end of the lease, you have nothing to show for all the money you spent. Also, because you’re paying for the depreciation of the vehicle, there is a mileage limit that comes with a lease, typically 12,000 miles. There are fees that will need to be paid if the milage limit is exceeded.
Pros to Buying
If you enjoy keeping your car for a long time, and not always having a car payment, then buying is the option for you. When you buy, you get to have the car for as long as you want. You make monthly payments on the price of the vehicle for however many months, during which time the lender owns the vehicle, and once those payments are complete, the car is yours. You no longer have to worry about monthly car payments. Another advantage to buying vs. leasing is that since the car is yours, you don’t have to worry about any extra fees and you are free to change the car as you’d like.
Cons to Buying
One drawback to buying is that when it comes time to purchasing a new vehicle, it’s hard to know what your current vehicle will be worth, whether selling privately or trading in. With a lease, the worth of the car is put down in writing at the signing of the lease, so you don’t have to worry if your car is worth less at the end of the lease. When buying, there is the potential to have negative equity, which means that the money you owe towards the loan when you’re ready for a new car is more than what your current car is worth. There is also a rather sizable downpayment that is required when buying a new car, typically ten to twenty percent of the car’s price. When buying, the monthly payments can also be more than when leasing, which means drawing out the loan to be up to seven years long. When paying for a new car over that many years, interest adds up quick, which means you’re likely paying much more than what the car’s original price was.
Whether you’re buying or leasing, you have to think about which option suits you and your lifestyle best. As detailed above, there are both pros and cons to each option. Here at Lupient Automotive Group, we will be happy to discuss with you which option is better for you and help get you into the car you’ve been dreaming about. We have a team of highly-skilled employees who want what is best for you. Take a look at this article for just one of many examples of how we go above and beyond: http://www.insightnews.com/news/12834-profile-in-excellence-david-jones-lupient-automotive