When it comes time to get your new car, you may be asking yourself if you should lease or buy. Each option is suited for different people, so it’s important to consider the pros and cons before you make your decision.
Drivers in Nashville, Gallatin, and Madison can learn more about leasing vs. buying with this helpful article from the team at Ron Hibbard Toyota.
Everyone’s circumstances are different, especially when it comes to their automotive needs and driving lifestyle. Leasing typically comes with lower monthly payments and little or no down payment, so you can usually get a newer vehicle for less money than if you finance. You also pay lower sales tax than with an auto loan.
The cost-to-own is lower as well because your vehicle is still protected by an included manufacturer warranty. This means that you have fewer repair costs and less maintenance with a lease than a loan.
The major appeal for most, however, is that leasing gives you an opportunity to try out a new vehicle every few years without compromising on trade or resale value. At the end of the lease, you drop off your vehicle and move to the next, without having to negotiate a price or finding a buyer.
Despite all the perks, leasing does come with a few drawbacks. You have the option to buy at the end of your lease, but you’re paying for a vehicle that you won’t own after a few years. Due to this, you may end up paying more for your leased car than you would with a loan that grants you ownership.
A lease can also include penalties. Most lease agreements allot 12,000 miles a year, which is acceptable for many drivers. However, if you’re the type of driver who puts a lot of mileage on your vehicle due to long work commutes or frequent and fun road trips, leasing may not be the right option for you. If you go over the allotted mileage, you could face overage fees when you return your lease at the end of the term. You could also pay potential wear-and-tear penalties.
It’s difficult to end a lease early as well, so you don’t have many options if your driving circumstances or needs change during your lease.
Buying a vehicle is a popular option for many people for a few reasons. When you buy a car, you own it and have control over it, which allows you to modify it however you wish. You’re also free of any penalties for mileage or wear and tear since it’s yours.
Buying a vehicle is an investment, too, so you have the option of using your vehicle as a trade-in when you decide to get a new one. You also have the option to sell it if your needs or circumstances change.
Buying a vehicle does have some downsides, however. Your monthly payments are usually higher. You should try to put down a significant down payment, so your payments are a bit lower. The cost-to-own is higher, too, since you’re responsible for all maintenance and repairs when the warranty is up.
You may also encounter issues or losses when it comes time to sell or trade. Lastly, your cash is tied up in your auto loan while the vehicle depreciates.
Explore Your Financing Options at Ron Hibbard Toyota
When it comes down to it, most of the differences with leasing vs. buying comes down to your driving lifestyle and personal preferences when it comes to financing your next car. Deciding between them comes down to you.
If you’re unsure of the right choice, visit Ron Hibbard Toyota to discuss it with an expert financial specialist. We’ve been helping customers in Nashville, Gallatin, and Madison for years, so stop by and see what we can do for you!