Buy Vs. Lease
When it comes to buying or leasing a car the options can be confusing. We want to make the choice easier for you. We have some useful information below to help you make a decision.
When buying a new or used car you are paying for the entirety of the vehicle. Leasing a new or used car means that you pay for only a portion of the vehicle’s cost that is paid during the time you are driving it.
Buying
Who Owns The Car?
Whether you are financing a car or pay for it in cash, the car is 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. Not meeting those requirements means that they are entitled to repossession.
Up-front Costs
If you’re financing it, the bank will probably request a down payment. Trade-Ins can be used as equity and a 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. (Having regular maintenance can help to raise the value of your car later!)
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 the Car?
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. Paying more up front can help to lower your monthly rate.
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.