Buying vs. Leasing
Auto Lease vs Buying a
Car
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 the new or used car you
pay for the entire cost of the vehicle. When you lease a new 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
Who Owns It
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, like a certain down payment amount and
timely monthly payments. If you don't, they have the right to repossess it.
Up-front Costs
If you're financing it, 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.
Future Value
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!)
End of Payments
Once you've paid off what you owe on your contract, that's it. Your vehicle is
100% yours. The lending institution will send you a Lien Release as proof that
the vehicle is completely paid off and all yours.
Leasing
Who Owns It
You do not own the car when you lease. You're 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. .
Up-front Costs
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.
Future Value
In most leases you don't end up owning it so you don't end up selling it.
That's the financial institution's job. Although you may 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.
End of Payments
Most people return the vehicle at the end of the lease term. But some like to
purchase it during their lease or at the end. 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.