To buy or to lease? That is the question.
Whether you want to lease or purchase a new car is a personal preference. However, you should consider certain aspects of your lifestyle before making a decision.
For instance, do you entertain clients and therefore prefer to have a luxury car? If so, you could drive a nice car at a lower cost if you choose to lease. In some situations, you can even get a tax write off. Do you prefer to drive a new car every few years? Again, leasing could be a good option for you. Or do you want to pay off a car and drive it until the wheels fall off? Then buying a car will be your best bet.
There are advantages and disadvantages to both leasing and buying. Consider the following information to make your decision.
- You can trade your vehicle in for a new car every few years.
- It requires a smaller down payment than when you buy a vehicle.
- Your monthly payments will be significantly lower.
- You only pay sales tax on the portion that you finance.
- There’s no trade-in hassle when the lease is up.
- With a three-year lease, a factory warranty covers the cost of most repairs.
- It is expensive to terminate a lease early.
- There is a limit on how many miles you can drive per year. If you go over, you will pay for it.
- Lease agreements can be very confusing to understand.
- You’ll be charged for wear and tear, and it can be costly.
- Once paid off the car is yours; you don’t owe anyone for damages.
- You can drive as many miles as you want with no penalty.
- You can sell your car or trade it in when you’re ready, rather than having to wait for a contract to expire.
- Car buying is more economical unless you like to trade-in often.
- Often requires a larger down payment.
- You are responsible for maintenance costs once the warranty expires.
- The monthly payments will likely be higher.
- Selling a car can be a hassle.
- Cars depreciate in value unlike other investments.
If you’re considering leasing or purchasing a vehicle, stop by Callaway Chrysler Dodge Jeep Ram and let a member of our friendly and knowledgeable financing team help you explore your vehicle financing options.
To prepare for purchasing a vehicle for the first time, read: 8 Tips for First-Time Car Buyers.