So you’ve decided it’s time for a new car – now what? One of the first major decisions you’ll need to make (besides which car to get), is whether you will buy or lease the car. Both options have benefits and drawbacks, and knowing what those are will help you to decide the best method of financing for your lifestyle.
Who should buy? Car shoppers who plan to keep their new car for more than three years, who drive a large amount of miles, and who hope to pay the car off and reduce the financial burden of a monthly car payment.
What are the benefits? When you purchase your next car, you can put as many miles on it as you want, customize it however you like, and sell it when you want to (or keep it as long as you want to). The single largest benefit is that when the car loan is paid off, you’ll have one less monthly expense.
What are the drawbacks? Because you are paying for the car’s entire value at the time of purchase, monthly payments will be higher than they would be in a lease. Additionally, you’ll likely be required to come up with a substantial cash down payment.
Who should buy? Car shoppers who usually buy a new car every few years, who don’t put more than 10,000 – 12,000 miles per year on their vehicles, and buyers who don’t mind carrying a car payment well into the future.
What are the benefits? Why you lease a vehicle, you only pay monthly payments based on the car’s estimated depreciation over the time you drive it. That means monthly payments are generally lower than if you bought the car. At the end of the lease period, you get to trade in your car for a new model.
What are the drawbacks? There are limits on how many miles you can drive and the car must be returned in like-new condition. Any damage to the car or extra miles driven will result in extra fees. Also keep in mind that insurance costs are generally higher for lessees.
Stop by DeLillo Chevrolet today to learn more!