Shopping for a new car is an exciting venture, as you research and compare all options. However, before you head to the dealership to begin the purchase process, it’s a good idea to know what kind of contract you want to get into. Learn a few of the differences between car leasing vs. buying, and go to the dealership informed.
Leasing a Car
Pros
Monthly payments are lower
- It is common for car dealerships to offer lease specials to move vehicles off the lot, and normally payments are less than they would be if one were purchasing a vehicle.
Down payment is lower
- Most of the time, as long as you have great credit, you shouldn’t have to pay a down payment for a leased car. If you do have to pay a down payment, it is generally much lower than if you are buying.
Trade in every few years
- With a leased car, you have the option to trade it in every few years for a brand new car.
Lower repair costs
- With leased cars, you are always under the manufacturer’s warranty, which means repair costs are lower since you won’t have to cover the cost.
Cons
You don’t own the car
- When you lease a vehicle, you never actually own the car. However, there is an option to buy when your lease is up.
Limited mileage
- The number of miles you are able to drive in a leased car is most commonly limited to between 10,000 and 12,000 miles per year. There is also the option to purchase additional miles if you tend to drive more than that annually.
More expensive
- In the long run, it can cost more to lease a vehicle than to buy, since you will always have car payments as long as you continue to lease.
Buying a Car
Pros
No mileage limit
- It’s your car, so you can drive it as much as you want and not worry about the number of miles you are putting on it.
Ability to make modifications
- When you buy a vehicle, it is yours and you can modify it as you wish.
Flexibility
- The car is yours since you bought it and you can sell it anytime you want.
Cons
Higher monthly payments
- Your monthly payments will be more expensive when you purchase a vehicle rather than lease.
Higher down payment
- The down payment is higher than leasing and in general is between 10% and 20% of the cost of the vehicle.
Limited warranty
- Once the factory warranty is over, you’ll have to cover the cost of repairs yourself.
Discuss your options in more detail, or begin your search for your new vehicle at one of our 20 dealerships. Stop by Valley Automall, just off the 95 and Auto Show Drive or call 702-570-2257.