The decision to lease or buy a new vehicle can be difficult to make. There are pros and cons to each, and it depends on personal preference and lifestyle.
If you are looking for low monthly payments and like to have a new vehicle every few years, then leasing may be for you. Leasing is when you pay for the depreciation of the vehicle over the lease term and not the full sticker price of the vehicle. Here are the pros and cons:
- Lease payments are typically lower than loan payments.
- You can return the vehicle at the end of the lease, pay any end-of-lease costs and move on to the next vehicle.
- The vehicle’s future value doesn’t affect you financially.
- If you want to end the lease early, early-termination fees can be almost as costly as finishing out the lease term.
- You have no equity in the vehicle.
- You are limited to the number of miles you drive on the vehicle. This can vary anywhere from 10,000 to 15,000 miles per year.
- At lease-end, you may have to pay for anything that isn’t considered normal wear and tear.
If you plan on keeping your vehicle for years to come and like taking road trips, buying a new vehicle may be your best option. When you buy a new vehicle, a loan is financed through the car dealership for the price of the vehicle plus tax. You then have monthly payments, with interest, to pay the dealership’s financial institution. Loan term options can be anywhere from 36 to 72 months, and monthly payments are split up evenly amongst the length of the loan.
Once the loan term has ended and you owe no remaining payments, it belongs to you. You can keep the vehicle for as long as you want or sell or trade it whenever you desire. Here are the pros and cons:
- You own the vehicle and can keep it for however long you want.
- You can sell or trade in the vehicle at any time.
- You can put as many miles on the vehicle as you like.
- The vehicle can be modified or customized however you please.
- Loan payments are typically higher than lease payments.
- You are responsible for selling or trading the vehicle when you are ready.
- Over the course of a loan term, the vehicle will depreciate and will be worth less when it comes time to sell or trade.
Please visit Clint Bowyer Autoplex in Emporia, Kansas or call us at (620) 343-6723 for more information. We look forward to helping you make this decision. Meanwhile, don’t forget to check out our new vehicle inventory here, which includes both lease and buy options.