When it comes to buying or leasing a car, many people are confused by the options. While there are definite benefits to either option, many customers don’t fully understand the differences, which sometimes results in making the wrong choice. As part of our goal to make this blog helpful to all of our customers and potential customers, we’re going to run through the benefits and drawbacks of each option so you’ll more fully understand the possibilities.


The Benefits of Buying

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The biggest benefit? You own the car. Once you’ve paid off the loan, you won’t have a monthly car payment.
• Also, since you own the car, you can drive it as much as you want – there are no mileage restrictions.
• Usually, your insurance policy limits will be lower when you buy.


The Drawbacks of Buying

• The most obvious drawback – you’ll have a higher monthly payment.
• When you buy, usually the dealer will require a much larger down payment.
• You could end up “upside-down” – if you put down a smaller down payment, depreciation could cause you to owe more on the vehicle than it’s actually worth.



The Benefits of Leasing

• The greatest benefit of leasing – lower cost of acquisition – not only are your monthly payments much less, you’ll have a significantly lower down payment and you won’t have to pay sales tax.
• You’ll get to drive a new car every few years.
• You’ll never be in an “upside-down” situation because you don’t actually own the car. You just turn it in at the end of the lease and walk away.
• If you can’t get approved for a higher dollar amount loan, leasing allows you to drive a more expensive vehicle than you could afford to buy.


The Drawbacks of Leasing

• The biggest drawback to leasing a car – you’ll always have a car payment.
• You’ll also have mileage restrictions. Most leases restrict your mileage to 15,000 miles per year. If you go over your allotted miles, you’ll have to pay an extra penalty.
• Your insurance company will charge higher coverage costs for leased vehicles.


So – Which Option Should You Choose?

We can’t answer that question for you. It’s really up to you, and your personal situation. Our dedicated staff is here to answer any questions you might have, and we’ll work with you to make sure that you make the right decision for your circumstances. Just give us a call at 800-238-5464 and we’ll explain the options in detail and help you make the decision that will work for you.