Key takeaways:
- Leasing a car can be a great way to get a new car without having to go through the inconvenience of trading in or selling your old one every few years. However, if you plan on driving more than the average person, leasing might not be the best option, as you could pay more in mileage fees.
- While financing a car may have higher monthly payments, you will eventually own the car outright. This can be beneficial if you keep the car for many years or pass it down to another family member.
- Before signing any papers, do your homework and compare offers from many vendors.
Deciding between buying and leasing is important, whether it’s your first or fifth car. Do you save money for a down payment and finance the remaining amount to buy your wheels? Or would renting a car—a lengthy rental—be a better option?
The choice between leasing or financing a car relies on many variables, including your budget, expected mileage, and how long you want to retain the vehicle. Here are some questions York Dodge has prepared for you to contemplate as you consider your options.
Question 01: What amount of car payment am I looking for?
Down payment:
A greater down payment might decrease your monthly payments if you’re financing a car. A down payment on a lease may or may not significantly lower your monthly payments. To evaluate total expenditures throughout the lease term, request two quotes: one with a down payment you can afford and one without.
Monthly payments:
When leasing a car, you’re only paying for the depreciation of the vehicle plus interest, taxes, fees, and any other charges specified in your lease agreement. However, when you are financing a car, you’re also paying for the interest on your loan. Throughout the loan, this can add up to hundreds or even thousands of dollars.
Question 02: How long do I plan to keep the car?
If you’re the person who constantly wants to drive something new, leasing can be a better choice than owning a car since lease lengths are typically three years. However, remember that if you need to return your leased vehicle early, you’ll still be responsible for paying any outstanding payments and contract termination costs. Financing or a car loan may be better if you value ownership and want to use the vehicle for as long as feasible.
Question 03: How many miles do I plan on driving per year?
Mileage is important to consider because, with a lease, you’re typically allotted a certain number of miles per year — usually between 12,000 to 15,000. If you go above that limit, you’ll be subject to fines and significant per-mile overage fees on top of that. When financing a car, there’s no limit on how many miles you can drive.
Question 04: How does the insurance involvement work?
Since the leasing company technically owns the vehicle outright and wants to ensure it is adequately insured in case of an accident, leasing frequently results in a higher insurance rate. Although the baseline coverage requirements won’t be as high, the finance company will still demand insurance when financing a car. Of course, you should always carry enough insurance to cover your needs.
Question 05: What matters more when it comes to trade-ins?
Leasing an automobile is hard to match for convenience. Driving to the dealership, turning over the keys, and walking away is about as easy as it gets. However, buying is preferable if you want the chance to receive cash for your old automobile. You may immediately start saving money by using whatever your automobile is worth during trade-in as a down payment for your future vehicle.
Question 06: Am I prepared for unexpected maintenance expenses?
All auto manufacturers provide standard warranties to cover broken items. Additionally, several automakers provide maintenance contracts that include wear-and-tear items like brakes, wipers, and engine oil. If you lease a car, your whole lease term could be covered, and you might not have to pay maintenance-related costs because these warranties and maintenance agreements often run for three or four years. After these contracts expire, you will be responsible for paying these costs or doing the necessary auto repairs if you decide to purchase and maintain your vehicle.
Question 07: Do I like to change?
You may receive a new automobile every two to three years by trading in your old one if you have a lease. Leasing may be ideal for people who like to have the newest car models and don’t mind making monthly payments. If you purchase a car, on the other hand, you can keep it for as long as you want and eventually sell it or trade it in for a new one.
Some individuals like to have the option of buying a new automobile every few years, while others prefer to make payments on something they already own outright.
Question 08: How well will I maintain its condition?
When you return a leased car after three years, normal wear and tear, such as worn tires and windshield wipers, is expected; anything past that might result in a fine. Purchasing a car can be a better choice if you want to stop thinking about this.
Question 09: Do I want to modify the vehicle?
You should purchase your automobile if you want it to reflect your individuality through features like unique wheels. Customizing a vehicle is typically not possible while leasing one. You might be able to recuperate some of your costs if you improve elements like the music system or the safety features when you trade the car in.
Question 10: Will I be working a side job with the car?
If you plan on starting a business or using a car to make extra money through services like Uber, you should purchase a car. Leasing companies typically frown upon this as contractual restrictions often apply to corporate usage. Additionally, driving for work might result in you exceeding your yearly mileage cap significantly. Before using the automobile for anything more than ordinary driving, it is important to first speak with the leasing company.
Ending note:
Leasing or financing a car is a big decision with many variables. Weigh all the pros and cons before choosing to ensure you get the best value and deal for your money.
York Dodge Chrysler Jeep RAM serving Prescott, Arizona, specializes in new and used automobiles. You can get your dream car with the help of our finance team.
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