What works best for you?
Benefits of leasing
- Typically lower payments
- Since you are only paying for the vehicle for a fixed amount of time, the monthly payment tends to be less.
- Typically needs less money down
- Due to the fact that you only have to pay for the fixed amount of time that you will have the vehicle, the amount you need to put down to get to your desired payment is much smaller than purchasing.
- Warranties
- Most manufacturer warranties allow you to take advantage of their benefits for the first three years or a specified number of miles. By choosing to lease your vehicle, you typically will find yourself being able to utilize those warranties the entirety of the time you have with that vehicle!
Drawbacks of leasing
- Set miles
- When deciding if leasing will work for you, the number of miles is one of the biggest points you will want to focus on while making your decision. Since you have promised to only put on a set amount of miles during the duration of your lease, it does require you to be very attentive to the amount of miles you are driving daily, weekly, monthly, and annually.
- Possible additional fees
- If you do go over the miles on your lease, there is an additional fee accrued. You also have a certain level of responsibility to keep the vehicle at its best condition as that can also affect the fee’s.
- You don’t own it at the end
- At the end of the lease term, you have two choices: to buy the lease out and continue to make payments or you can turn your lease in. If you chose to buy the lease out, you will mostly likely finance the remainder and continue to make payments until you pay off the entirety of that loan.
Benefits of buying
- No mileage limit
- When purchasing a vehicle, one thing you won’t have to constantly we checking is your mileage! If you chose to purchase your next car you don’t have to worry about taking that extra long road trip or any additional fees you will accrue due to driving over a designated mileage amount.
- You own the vehicle
- Since you have purchased your vehicle, you don’t need to sweat what you will do when you are ready to get into a new vehicle! Once you have managed to pay off your loan, you can sell it outright and hopefully have some equity to puts towards another vehicle.
Drawbacks of buying
- Typically a higher monthly payment
- Unlike leasing, your monthly payment when purchasing a vehicle is based on the entire cost of the vehicle.
- Typically a larger down payment is required
- To get to your desired payment, you will most likely have to put more money down.
- Long term service costs
- If things go bad or break on your vehicle, you are the one required to front that cost for repair.
