If you're deciding whether to buy or lease a vehicle, you'll want to know about the perks and potential drawbacks of both options. It's not an easy decision, but the experts at McGovern Auto Group are here to help you determine which is your best choice, depending on your specific situation.
Below, we'll run down the pros and cons of both buying and leasing to give you some food for thought as you make your decision on how to finance a new Chrysler, Jeep, Dodge, Ram, Honda, Toyota, Hyundai, or Subaru.
Buy a New or Used Vehicle
Pros
You'll have it for keeps. If you want a car that you that will be your chariot and companion for years to come, buying is your only option. We understand that people tend to get attached to their vehicles (and can't blame them) and we'll work with you to make your dream come true, whether you're eyeing a reliable used model or want one fresh off the line. Plus, buying comes without mileage restrictions.
Once it's paid off, say goodbye to monthly payments. This makes buying a more cost-efficient option in the long term, but you'll still need to factor in insurance, repairs, and maintenance into your transportation budget. If you take good care of your car, you'll also be looking at a pay day when it comes time to trade it in, so choosing a model with good resale value is key when looking to buy.
Cons
You'll pay more up front. Most lenders will require a down payment of 10 to 20 percent of the vehicle's value, so you'll need to be financially prepared to make a purchase - even if you're planning to finance a car. There are some cases where you'll be able to forego a down payment, but bear in mind that your monthly payments will be higher.
If monthly payments get too high and you need to extend your loan, the amount you pay in interest will go up. The longer the re-payment period, the more you pay in the end, which can negate any resale value the car might have when you want to sell. Before you buy, make sure you can afford the monthly payments.
Lease a New or Used Vehicle
Pros
Leasing a car tends to be less expensive than buying because you're only paying the projected depreciation of the vehicle over the term of the lease (as well as some fees that may apply). This also makes leasing less risky than buying, because if the car depreciates faster than estimated, your payment stays the same. Conversely, buyers whose vehicles depreciate quickly still pay the full amount and may see a smaller pay day in the end.
Owning a new car is more affordable with leasing. A lease only lasts about three years, so repairs and maintenance are usually covered under warranty with leased vehicles. Plus, if you continually lease, you'll always have a new car with the latest features for less than what it would cost to buy a new car every few years.
Cons
You're restricted in mileage. Your lease will dictate how many miles you can put on the car without being charged an overage fee, and the range is typically from 9,000 to 15,000 miles per year. If you have a long commute or are planning on taking frequent road trips, a lease may quickly get costly.
You can't customize a leased vehicle. When you lease a car, the dealership owns it, and they'll want it returned in pristine condition. Aside from normal wear and tear, any changes or damage made to the car will likely be a liability when the lease term is over.
Ultimately, your decision should be made based on what's the most practical and affordable for you. Our finance experts can help you decide, so give us a call today and find out the most cost-efficient way to get on the road with a new set of wheels.