When you are looking for your next vehicle, it can be
confusing to know what the best purchasing option is for you. When you are
considering leasing a car or getting a car loan, it is important to know the
pros and cons. Billion Auto is here to help with some quick knowledge and, if
needed, a finance department that can help.
There are benefits to both leasing or buying a car and
it is important to know the pros and cons of each. Here are a few of the pros
for leasing:
-
Lower Payments: When leasing, you are
paying for the vehicle’s depreciation, the value lost while you drive it,
instead of owning it. This means that monthly costs are often less than when
buying.
-
Ability to drive a new car every few
years: The average length of a lease contract is 36 months, or a 3-year lease.
This gives you more ability to upgrade sooner and drive something new. If you
want to have the newest tech or more modern features, leasing can be a good
fit.
-
No worries about selling/trading: When the
lease ends, you simply return the car back to the dealership and can start a
new lease. You can avoid the stress of trying to sell or trading it in.
Buying or financing a vehicle is a good option for
those who are looking for a bit more freedom with their vehicle. Here are a few
of the pros:
-
Ownership: One big difference between
buying and leasing is ownership of the vehicle. When you do an auto loan, your
monthly payments go to eventually owning the vehicle you’ve purchased.
-
No mileage restrictions: One con for
leases is the mileage limits, which restrict how many miles you can add to the
vehicle. When you own your vehicle, the only mileage restriction is what you
want it to be.
-
Customization: For some, making their
vehicle all their own is important. When you purchase a vehicle, you have the
freedom to modify it. When you lease, the dealership still owns the vehicle,
and you have to keep the vehicle as it is.
Once you know the pros and cons of buying vs leasing,
there are a few more factors to consider:
-
Financial: What is your budget? How much
can you afford for a monthly payment? These are important questions to answer
when looking for a new vehicle. While lease payments can be less than a loan
payment, both can be affected by interest rates, credit scores, and down
payments.
-
Driving habits and mileage: will you be
able to stay under the mileage restrictions? Mileage is an important part of
leasing and can make it more expensive in the end if you go above the mileage
restriction. For those who drive far often, buying may be the better option.
-
Future car plans: Consider what you’re
driving or ownership goals are. Do you want a more long-term vehicle or change
vehicles more often? Will your vehicle meet your needs in the next 3-5 years?
These are important questions to consider.
Other things to consider in the leasing vs buying
debate are insurance requirements, maintenance/repair responsibilities, and
resale value.
Before deciding whether to buy or lease, check what
insurance requirements there are for each option. Car insurance requirements
vary from state to state, but they also have different requirements for buying
vs leasing. When you lease, you will typically need greater
coverage. Of course, that may not be out of your budget
depending on how much the monthly payment is compared to when purchasing.
When it comes to maintenance and repair, there can be
a difference in requirements. When you lease a vehicle, you will have to
maintain the vehicle in good condition. This can mean extra service
appointments and costs for things you may normally let slide if you bought the
car. If not well maintained, you may have extra charges at the end of the
lease term for excess wear-and-tear.
For resale value and depreciation, there is a key
difference to consider. While a purchased vehicle will depreciate, you will own
it, build equity, and be able to use its cash value as you see fit. If you
lease it, you won’t have to deal with future depreciation issues, but you have
no equity in the vehicle. When looking at this, consider whether you want to
own it or if an almost renting situation would work best for you.
Once you have all the information, it is time to make
a decision. Both options have their pros and cons, and the decision will come
down to your needs and goals. When you are ready, Billion Auto is here to
help with experienced sales and financing teams to find you your future car.
Check out our new and used vehicles today. See one you like and want to buy? Get pre-approved today here!
