Buying vs. Leasing
Buying vs. Leasing
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 the new or used 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
Ownership: You own the vehicle and get to keep it as long as you want.
Up-Front Costs: Includes the cash price or a down payment, taxes, registration, and other fees.
Monthly Payments: Loan payments are usually higher than lease payments because you're paying off the entire purchase price of the vehicle, plus interest and other finance charges, taxes, and fees.
Vehicle Return: You'll have to deal with selling or trading in your car when you decide you want a different one. The vehicle will depreciate, but its cash value is yours to use as you like.
Mileage: You're free to drive as many miles as you want, but higher mileage lowers the vehicle's trade-in or resale value.
Excessive Wear & Tear: You don't have to worry about wear and tear, but it could lower the vehicle's trade-in or resale value.
Customizing: The vehicle is yours to modify or customize as you like.
Early Termination: You can sell or trade in your vehicle at any time. If necessary, money from the sale can be used to pay off any loan balance.
End of Term: At the end of the loan term (typically four to five years), you have no further loan payments. You have built equity to help pay for your next vehicle.
Leasing
Ownership: You don't own the vehicle. You get to use it but must return it at the end of the lease unless you decide to buy it.
Up-Front Costs: Typically includes the first month's payment, a refundable security deposit, a down payment, taxes, registration, and other fees.
Monthly Payments: Lease payments are usually lower than loan payments because you're paying only for the vehicle's depreciation during the lease term, plus interest charges (called rent charges), taxes, and fees.
Vehicle Return: You can return the vehicle at lease-end, pay any end-of-lease costs, and walk away.
Mileage: Most leases limit the number of miles you may drive, often 12,000 to 15,000 per year. (You can negotiate a higher mileage limit.) You'll have to pay charges for exceeding your limits.
Excessive Wear & Tear: Most leases hold you responsible. You'll have to pay extra charges for exceeding what is considered normal wear and tear.
Customizing: Because the lessor wants the vehicle returned in sellable condition, custom modifications or added parts you installed will need to be removed before you return the car. If there is any residual damage, you'll have to pay to have it fixed.
Early Termination: If you end the lease early, early-termination charges can be almost as costly as sticking with the contract.
End of Term: At the end of the lease (typically two to four years), you have to finance the purchase of the car, lease a new one, or buy another.
