Buying vs. Leasing: What You Need to Know
If you’re on a tight budget, a lease agreement might be right for you. While leasing used to be only for corporations or luxury car buyers, increasing vehicle prices have turned leasing into a popular option for everybody.
With leasing, your monthly payments will be lower than if you financed a vehicle, and there are lower or no repair costs thanks to factory warranties. This means that you can use a reliable vehicle for an extended period without the headache of expensive repairs.
Routine maintenance like oil changes and tire rotations often fall to you. Keep documentation of these services to make sure you’re not fined at the end of the lease.
It’s also important to know that when your lease is up, it’s easy to upgrade to a different model. Most leases last three years, so if you want to make sure you’re always riding in the most cutting-edge vehicle, leasing is a good choice.
If you take a lot of long trips or want to personalize your vehicle permanently, you shouldn’t lease. Lease agreements often include stipulations that limit how many miles you can put on the vehicle and what types of customizations you can make to the car. Make sure you know every line of your lease agreement before you sign.
Financing your vehicle is a better choice if you plan on keeping your car for a long period of time. When you finish paying off your loan, you’ll officially own the car and the lender will transfer the title to your name. As long as you are driving a paid off vehicle, you don’t have to worry about any monthly car payments.
There are no mileage restrictions on a car that you finance. If you have a long commute or if you live out in the country, financing a vehicle is probably the way to go.
However, financing a vehicle isn’t feasible for everyone. The down payment on a car you buy will be higher than on a car you lease. Most car loan companies need between 10 and 20% down, making it a large upfront expense.
Also worth noting: when you trade your car in, you’re susceptible to changes in its market value. You can find cars with awards like Kelley Blue Book’s Best Resale Value to try to curb any potential losses, but it’s important to note that nobody can ever predict exactly how much a fluctuating market can affect your car’s value.
Need to Know More? We’re Here to Help
Choosing how to get your next vehicle is a big decision. The financial experts at Zimbrick Nissan are here to help. Stop by and talk to us in person or speak with us over the phone. We can’t wait to get you in the new ride you’ve been waiting for.