When it comes to whether to buy or lease a car the options can be confusing.
To help you make an informed decision we have provided the information below, we
hope you find it informative and useful.
Buying
Who Owns It
Whether you pay for the car with cash, or finance it and make monthly payments,
either way it’s yours. Of course, if you’re financing it you’ll have to meet the
obligations the lender requires, like a certain down payment amount and timely monthly
payments. If you don’t, they have the right to repossess it.
Up-front Costs
If you’re financing it, you’ll probably need to come up with a down payment.
You can also trade-in another vehicle and use any equity towards your down payment.
The amount of the down payment is usually based on the lender’s requirements and
your credit score.
Future Value
Your vehicle will be worth whatever you can sell it for in the future and that
depends on how well you maintain it. (Be smart and protect your investment with
regular scheduled maintenance by a factory-authorized facility!)
End of Payments
Once you’ve paid off what you owe on your contract, that’s it. Your vehicle is
100% yours. The lending institution will probably send you a “Green Slip” as proof
that the vehicle is completely paid off and all yours.
Leasing
Who Owns It
You do not own the car when you lease. You’re paying for the use of the vehicle,
but the finance institution that you leased it through actually owns it. This is
usually why you pay less per month in a lease than if you were to buy the car. .
Up-front Costs
Leases often do not require any type of a down payment. All you usually have
to pay is the first month’s payment, a security deposit, the acquisition fee and
other fees and taxes. But, as with a purchase, if you want to lower your monthly
payments you can always pay more upfront.
Future Value
In most leases you don’t end up owning it so you don’t end up selling it. That’s
the financial institution’s job. Although you may have mileage limits and wear and
tear guidelines that, if you exceed them, could cost you extra money when you turn
your vehicle back in.
End of Payments
Most people return the vehicle at the end of the lease term. But some like to
purchase it during their lease or at the end. Others like to trade it in before
their lease is over. Just ask us about these different options before signing any
paperwork and we’ll make sure you have your lease set up the way you want it.
