Depending on your financial situation, your personality, and your driving habits, you may prefer to buy or lease. There are benefits to both of these options, which is one reason you should carefully consider the differences between the two. To find out more about the differences, here’s a breakdown of what each type of financing has to offer.
Leasing is essentially like renting a vehicle from the dealership. You may pay little to nothing down, like a deposit, and the monthly payments tend to be less. You will be responsible for the upkeep of the vehicle, and there can sometimes be mileage restrictions based on your specific contract. Leasing is great for those looking to get the lowest monthly payment possible, but still have a reliable and newer vehicle; however, you don’t get to keep the car when your lease is up.
Most buyers tend to make a large down payment (about 20% of the sticker price) and finance the rest through the dealership or some other financial institution. Although your monthly payments will tend to be higher when you buy a vehicle, you get to keep it when the car is paid off. In addition, this also gives you a car to trade-in towards the purchase of another car, whereas the end of lease provides you nothing. Unlike a Lease, this is like a long-term investment; nonetheless, you will have to have more money up front to buy a vehicle.
It’s not always easy to determine which method of getting a vehicle is right for you. Leasing tends to be for individuals who may not be able to afford a down payment or higher payments such as recent graduates, part-time workers, or those on a fixed income. If you don’t have much money saved up, you can still get a car by leasing it. Plus, leasing is great for those looking to get the nicest car possible—with lower monthly payments, you can usually upgrade to a sport or luxury vehicle for less than it would cost to buy those vehicles. Leasing is also safer financially; because you can’t go upside-down on a car loan (when you owe more than a vehicle is worth).
Buying is the preferred method for most car shoppers. If you can afford large monthly payments, a down payment, and if you have good credit, you should consider buying and financing. Buying a car means you invest equity in that particular vehicle. Much like a long-term investment, that car is considered an asset for you.
Still have questions? Stop by Sun State Ford to talk to experts in our finance department. We can help you find your dream car, regardless of whether or not you buy or lease. In addition to normal financing options, here are Sun State Ford, we offer Second Chance Financing to help give you more options when searching for a car.