It is true that monthly payments are typically less when leasing a car than those associated with buying. This is because when you lease a vehicle, you are paying for the depreciation value of the vehicle (along with interest charges, taxes, and fees) instead of paying for the full purchase price of the vehicle.
In addition to this, the down payment on a lease is often much lower than when buying a car. This combined with a lower monthly payment often allows people to “afford” more expensive models or higher trim levels than they may necessarily be able to buy.
However, at the end of a lease term, you don’t own anything. You must then decide whether to buy the car outright or move on to another lease.
At the end of a car loan term, you will own that vehicle in full. Though it may have depreciated over the years, you still have equity, or cash value, in the vehicle. So you may continue to drive the vehicle without making monthly payments or you may sell it.
One huge perk to leasing a vehicle is that it is almost always under warranty during the lease term. Factory warranty will cover any mechanical repair not related to accident or abuse, which means that drivers who chose to lease may avoid repair costs associated with their vehicle.
When buying a car, the owner will typically own the vehicle longer than the factory warranty lasts. This means that as the car ages and is subject to standard wear-and-tear, the owner will be responsible for the cost of maintenance and repair.3. Freedom
Do you mostly use your vehicle for general commuting purposes- going to work, running errands, driving around town? Or are you someone who enjoys using your vehicle for frequent travel?
Leases have mileage restrictions while loans to purchase do not. Most leases allow between 10,000 and 15,000 miles per year. If this mileage is exceeded at the end of the lease term, drivers have to pay for the miles that exceeded your limit. Depending on the automaker, these overage fees can be up to $0.50 per mile! Even though Honda’s fees don’t exceed $0.20 per mile, your projected mileage is still a valuable consideration when chosing to lease or buy!4. “Bells & Whistles”
Car safety, technology, and features are constantly evolving. Proctor Dealerships have been around since 1910, with Proctor Honda opening its doors in the 1970’s. The amount of improvement that has occurred in automotive design, engineering, and manufacturing during our years in business is incredible!
As a driver, if you are someone who always wants to experience the latest and greatest features that a vehicle has to offer, then leasing may be for you! Since most lease terms are three years, this means that drivers will be trading in vehicles regularly and will be able to experience all that a new car has to offer quite often.
However, if saving more money in the long-run is of greater value to you than always driving a new car, buying is always a great option! If you plan on owning your car for a long time, be sure to do your research to find a vehicle that has the optimum safety, technology, and design features for your needs.5. Parting Ways
Though it may be hard to imagine right now, as you excitedly research your new ride, one day you will likely part ways with it. Your preferences for “parting ways” with your vehicle are actually a valuable consideration when deciding whether to buy or lease.
For some people, leasing may be an attractive option since they are able to avoid the perceived hassle of selling or trading in their vehicle. For others, it provides peace of mind to know that when they no longer want to own their vehicle, they can sell or trade it for cash.
Occasionally life will throw a curveball- such as unexpected home or medical expenses or perhaps the loss of a job. Lease contracts are more challenging to get out of early, whereas a purchased car can always be sold to free up some cash. For these reasons, it’s important to consider how financially flexible your situation may be in the long term.
Let our skilled financing team tell you more about the buying and leasing process at Proctor Honda!