Getting a new car is always exciting. The question these days is whether buying or leasing is the right choice.
This guide will break down the key differences between buying and leasing to help you make an informed decision. If you are ready to shop, Earnhardt Auto Centers carry popular vehicles by 15 brands at 17 dealerships.
Taking out a loan for a new car is an investment. You'll own the vehicle outright at the end of your loan term, and you'll have the freedom to drive it as much as you want, customize it to your liking, and sell it or trade it in whenever you choose.
Ownership: The car is yours once the loan is paid off.
Customization: You can modify the car as you see fit.
No Excess Mileage: Drive as much as you want without penalty.
Build Equity: Your car is an asset that can be sold or traded later.
Higher Monthly Payments: Loan payments are typically higher than lease payments.
Depreciation: Cars lose value over time, and you absorb that cost.
Repair Costs: Eventually car repairs can be more expensive than monthly payments.
Benefits of Leasing
Leasing a car means that your ride is exclusively yours for a certain amount of time. You have many of the rights of a car owner while the lease contract is in effect. It feels like car ownership, but there are yearly mileage limits and other requirements designed to keep the vehicle in good working order. It is not an investment, just an excellent mode of transportation.
When you lease a car, truck or SUV, the time period is shorter than a loan. Presumably, the car payments will be lower since the leasing price is lower than the purchase price. This approach can minimize upfront costs and assist with tight budgets.
Many drivers use leasing to get a premium product for their automotive dollar. That’s why top trims and luxury cars are among the most popular vehicles to lease.
Lower Monthly Payments: Leases generally have the most affordable monthly payments.
New Car Every Few Years: Enjoy the latest features and technology with a new car regularly.
Less Worry About Repairs: Most repairs are covered under warranty during the lease term.
Lease Specials: For brand new cars, lease specials are more likely than lower prices due to availability and demand.
Mileage Limits: You'll be charged extra if you exceed the allotted mileage. Usually this is 10,000 or 15,000 miles per year.
No Ownership: You return the car at the end of the lease.
Early Termination Fees: Ending a lease early can be expensive.
No Customization: Modifications are prohibited so you shouldn’t invest in accessories that can alter the car engine, bodywork, or interior integrity.
What Type of Buyer Favors Purchase?
For those who put a lot of miles on the odometer every year, purchase is always a better idea. A good dealership can help you find the down payment and loan payments that suit your budget.
Owning a car is often a sign of how settled your life is. There are no big changes such as an empty nest or retirement in the next five to ten years. So you feel safe that the size of the car you want now is exactly what you’ll need down the road.
Today’s cars are so well built that it is logical to imagine driving them for up to ten years with few problems. If you are willing to put in the time to keep them maintained, you’ll enjoy long term ownership well past the last loan payment.
What Type of Driver Leases Cars?
Leasing is often the choice of buyers who want their first new car or who want to upgrade their driving habits. It’s definitely a way of controlling your spending while still getting the vehicle brand and trim level that you want.
Other drivers who love leasing are those who travel widely by plane. They don’t need a car at home that can travel thousands of miles.
Often young professionals choose to lease a vehicle because their life is changing quickly. They want to be ready for the next stage in life.
Another typical lessee is the one who loves “the next best thing.” They are the tech geeks who want the latest and greatest tech toys and tools every few years. They are the stylistas who want the freedom to follow trends. And they are the busy executives who think of their ride as an extension of their work personality.
You don't drive many miles (10,000 to 15,000 a year).
You prefer predictable monthly costs and want to escape high interest rates.
You like driving a new car every few years.
You want lower monthly payments for a tight budget.
You want a higher trim level or a luxury ride without breaking your budget.
You want your car to be a long-term investment (6 to 10 years of ownership).
Your budgeting plans look forward to a time when the loan is paid off and you have no car payments.
You anticipate passing your car to your kids or grandkids.
You drive a lot of miles per year and/or your car tends to show excess wear and tear.
You want to personalize your ride with accessories and/or off-roading equipment.
Professional Advice is Key
To get personalized advice and explore your options, visit Earnhardt Auto Centers. Their experienced finance professionals can help you find the perfect car and financing solution to fit your budget and lifestyle.
Whether you choose to buy or lease, our family-owned dealerships can make the process straightforward and hassle-free. You can also check our online No Bull Express for a convenient way to complete your car-buying journey at home.
