Should You Buy or Lease Your Next Car?
If you're getting ready to trade-in your vehicle for a new one, you might be wondering if you should lease or buy your next vehicle. It's a common debate for a lot of car shoppers but which is best really depends on your needs and wants. But before you make any decisions, it's important to know all your options and of course…
What is the difference between buying and leasing?
When you finance or buy a vehicle, it becomes yours. You're free to drive it as many miles as you want and customize it as you see fit -- whether that's upgrading the wheels, adding custom paint or sticking a bumper sticker on the back.
When you lease a vehicle, you're really just borrowing it from the dealership. The dealership still owns the vehicle and they'll want to sell it when your lease is up. So when you lease, you need to follow the rules you agree on in a leasing contract. So, you'll probably have to watch your mileage, stick to a maintenance schedule and agree to return the vehicle in the same condition it was when you leased it.
Buying and leasing offer distinct advantages and disadvantages, depending on your own personal needs. So what's right for you truly depends on your plans for the next few years.
So let's take a look at some of the pros and cons to consider when it comes to buying or leasing your next vehicle.
Pros and Cons of Buying
- The vehicle is yours. You can customize your vehicle however you want and it's yours until the day you decide to sell it.
- You can rack up as many miles as you need without worrying about a cap.
- You are free to sell your car whenever you want.
- You'll likely need a higher down payment than a lease.
- Your monthly payments will probably be higher too -- but once your car's paid off, you won't have any payments.
- You're responsible for all of the maintenance costs beyond warranties.
Pros and Cons of Leasing
- The vehicle belongs to the dealership. You're going to borrow it for a set term (usually 2 or 3 years)
- You can typically get more options and a "better" vehicle for less money per month than if you were to buy.
- Repair costs are lower since most warranties cover repairs for the first three years
- You can get a new car to drive every two to three years
- You'll need to monitor your miles and pay fees if you go over the agreed amount
Hopefully this guide has been helpful. You might also find this quick "Buy or Lease" questionnaire helpful too. It's designed to help you determine which option might be best for your needs. If you're still not sure or just want to talk to one of our financing experts, please reach out anytime. We'll be happy to help you.