Do know you need a new vehicle but you’re not sure whether you should buy it outright or lease it for a few years? Both options have their own set of pros and cons to consider. Check out the comparison below to see whether buying or leasing is the right way forward for you.
Pros and Cons of Buying
Ownership has its advantages, whether you’re paying cold, hard cash for your next vehicle or financing:
• Buying a car means you own it outright once it’s paid off in full. Whether you keep it for as long as you want or sell it is completely up to you.
• Unlike a lease, you’ll have some equity in your vehicle, although you’ll also have to deal with depreciation.
• You can put as many miles on your car as you want, but keep in mind that high mileage can easily reduce your car’s resale or trade-in value.
• You won’t have to worry as much about wear and tear, although it’ll have a long-term impact on the car’s resale value.
• You can customize or modify your vehicle however you wish, although some customizations may affect your warranty.
• You’ll face higher loan payments since you’re paying off the car’s total purchase price, including interest and finance charges.
• You’re free to sell or trade in your vehicle at any time and use the proceeds to pay off the remaining loan balance.
Pros and Cons of Leasing
Here’s what to consider if you’re thinking about leasing your next vehicle:
• Leasing means you’re not locked into a long-term contract. Whereas most finance terms can last 60, 72 or even 96 months or more, most lease terms last for 36 months or less.
• You’ll enjoy lower payments since you’re only paying for the car’s depreciation during the lease term. However, you won’t build any equity in the vehicle.
• Oil changes and other routine maintenance usually comes at no cost, reducing overall maintenance costs.
• Most leases limit you to less than 15,000 miles per year, plus you’ll pay steep charges for exceeding those limits.
• Most leases also charge you extra for excessive wear and tear, making it essential to keep up with regular maintenance and care.
• The vehicle must be returned at the end of the lease in saleable condition, making customization more difficult.
• Leasing allows you to walk away at the end of the lease and try out another vehicle – a big advantage if your car buying needs change drastically or you want to try something different.
• You won’t have to sell the vehicle yourself – simply return it to the dealership at lease’s end and you’re done. However, breaking the lease early may result in steep fees.
• If you really like the car and don’t want to let it go, you can exercise the lease buyout option and buy the vehicle outright.
Which Option Works for You?
When it comes to buying vs. leasing a car, there’s no one simple answer. If you love riding around in the latest and greatest or don’t want to deal with the hassles of long-term maintenance, then leasing your next vehicle makes sense. Leasing also gives you the freedom to upgrade to a nicer ride with better features without paying an arm and a leg for the privilege. You can even use your lease as a tax write-off if you own a business and need a vehicle for entertaining clients.
Buying a car is the better option if you have a long commute or plan on going on multiple road trips, which could quickly eat into a leased vehicle’s limited mileage. You’re also better off buying a car if you plan on keeping it for as long as possible and don’t mind taking the depreciation hit.
Have any more questions about buying or leasing your next new vehicle? Stop by Rob Green Nissan and learn more from our dedicated sales team.
