Are you considering purchasing a new vehicle? You may have been told by various sources buying or leasing is better, but which is actually the best? Windsor Ford’s Finance Department is here with some helpful information to help you understand the differences between your options.
What Is Leasing?
When you lease a vehicle, you pay a low down payment and a low monthly payment for the life of the lease (normally a few years). At the end of the lease, you return the car. With a lease, you aren’t buying the vehicle, in actuality you are paying for the depreciation on the value of the car during the time which you will have it.
The Benefits of Leasing
The number one benefit to leasing is that there are lower monthly payments. Monthly payments on a leased car can be hundreds of dollars per month lower than when you finance, and down payments are usually low as well. You can probably afford a more expensive vehicle when leasing than you can when purchasing.
Leasing a car also means that you get to replace the vehicle every few years. Many vehicle manufacturers offer warranties for the beginning of the car’s life, so leasing may mean that you avoid any mechanical repairs. Even some of the standard oil changes may be covered.
The Benefits of Buying
The major upside to buying a vehicle is that you get to keep the vehicle once you’ve finished paying for it. After keeping the vehicle, you can sell it to recoup some of the money that you spent on it in the first place, or you can trade it in for a nice down payment on a new vehicle.
Buying a vehicle also means that you can drive as many miles as you would like. Leasing often means that there are mile limits on how much you can drive the vehicle, and any amount over that limit will cost you more. Other things such as deferred maintenance or failure to maintain proper gap insurance may also cost you money at the end of a lease. A purchased car, however, is not subject to lease-end charges.
Leasing vs. Buying
Ultimately, buying is usually the lower-cost option in the long run, especially if you keep your vehicle for the entire financing period. However, you may be a driver who likes to have the latest in vehicle technology, or you might want to replace your vehicle every few years to avoid high maintenance costs. In this case, leasing may be a better option for you.
There are some major upsides to buying or leasing a vehicle, but buying is more economical in the long run. Windsor Ford in Grand Prairie offers a variety of options for financing a new vehicle purchase.