Buy vs Lease: Which is Right for You?
Well, the most difficult part of the car shopping experience is over: You’ve selected the perfect model. Now all that’s left for Danvers, Peabody, and Salem drivers is financing. But wait-which option is right for you, buying or leasing?
In a head-to-head matchup of buy vs. lease, there’s plenty of pros and cons that drivers need to be aware of. And the Ira Toyota of Danvers team is here to help you parse through them.
Buy vs Lease Comparison
|Buying a Car||Leasing a Car|
|Upfront Cost||Sizeable down payment||Less money upfront|
|Monthly Payments||Higher monthly payment||Lower monthly payment|
|Trade-In||Trade-in value applied to next car||No trade-in available|
|Equity||Negative equity if you sell your car before it’s paid off||No potential for negative equity|
|Warranty||After warranty expires, owner is responsible for maintenance||Maintenance is usually covered under warranty|
|Mileage||No limit on mileage||Limited mileage according to leasing terms|
Buying vs Leasing Pros & Cons
Despite the many differences between these financing options, both can be highly beneficial. It all depends on your lifestyle. Here are the points you’ll have to take into consideration when choosing.
Leasing Pros & Cons
- Pro: A lease is less expensive.
The main difference between buying and leasing is the payments. See, when you buy, you’re paying the full MSRP of the vehicle. When you’re leasing, however, you’re just paying the value of the depreciation that occurs while in your possession. Ultimately, that means that monthly payments are going to be substantially lower.
There’s also fewer up-front costs with a lease. Without a down payment and with little to no sales tax, you won’t have to shell out as much on purchase day.
- Con: The car comes with limitations.
Since you don’t technically own your lease, there are limits that come with it. You can only put a pre-determined number of miles on the car, you can’t incur too much wear and tear, and you aren’t allowed to add in any additional parts or accessories.
If you violate any of these terms over the course of your lease, you’re going to have to pay a penalty to make up for it.
- Pro: You’ll have a new car every few years.
One of the nicest things about jumping from lease to lease is that you always end up driving something relatively new. The typical lease term is two or three years, so by the time the gadgets in the car start to become outdated, you’ll be ready to trade in for a new model.
Next Step: How Do I Lease a Car?
Buying Pros & Cons
- Pro: You can customize the car to your heart’s content.
True ownership means that you can do what you wish with the car. Repaint it, tint the windows, add in a new stereo-whatever you desire! These upgrades may alter the value of the car, but if you plan on driving it for years to come, what’s the difference?
- Con: Selling or trading is a lengthier process.
When leasing, trading in for a new model is as easy as pie. You could be in and out of the dealership with a new car in an hour. However, when you buy, the process is definitely going to be lengthier.
Despite this drawback, however, there is a built-in positive here too: you can make some cash off a private sale or trade-in.
- Pro: Eventually, the payments will end.
Another huge buying advantage is that eventually, the payments are going to stop. Once you have the car all paid off, you could potentially drive it for years without having to worry about a bill. That’s a huge relief!
Sit Down with Our Finance Department Today
When it comes to buying and leasing, the right choice depends on the driver. For some, the pros of buying may outweigh the pros of leasing, or vice-versa. It’s all up to you.
Do you need financing assistance in the Danvers, Peabody, or Salem areas? Then you’ll want to sit down with the Ira Toyota of Danvers finance team. Contact us today for more information!