Leasing vs Financing a New Vehicle
Although not necessarily a new concept when it comes to getting a vehicle, leasing is gaining more ground as automotive prices soar and as more people decide to work from home, which limits the number of miles they must travel. Premier Chevrolet of Carlsbad offers both options, so if you live in Encintas, Vista, and Carlsbad, you have the ability to lease or buy, but which is the better option?
Buying a New Vehicle
Buying for most means you get a conventional car loan from a credit union, bank, or some other lending organization. You have an amount that you are responsible for each month. Most loans of this nature are set up on a 5–7-year term for the loan. When you have completed the term of the loan and the last payment is made, the vehicle is yours.
Leasing a New Vehicle
Many people choose the lease option because they want the latest features that are available on a newer vehicle model. The option to lease provides a more affordable avenue to get the latest features and cutting-edge technology to enjoy when you drive. Which is the better way to get a vehicle? It depends on personal preference, but there are some considerations that you should be aware of to make an informed decision.
Advantages of Leasing
- You are driving the vehicle at its peak, performance-wise.
- You are driving a newer vehicle that still has the manufacturer’s warranty.
- Your lease may include free scheduled maintenance like oil changes.
- You are driving a higher-end vehicle that is better equipped that you may not have been able to afford otherwise.
- Option packages that include advanced safety features are part of the lease payment.
- You needn’t worry about trade-in values or the hassles of trade-ins or selling the vehicle.
- When your term is over, just drop the vehicle off.
- If you own a business, you may get a tax break.
Disadvantages of Leasing
- Leasing multiple vehicles back-to-back mean never-ending payments.
- When your term is over, the vehicle would have depreciated and you would likely have paid more than an equivalent loan.
- Excess wear and tear charges apply if the vehicle was not well-maintained or if there is any damage.
- A leasing contract only allows for a limited number of miles, exceeding that means you must pay excessive mileage penalties.
- You must bring the vehicle back in “as it left the showroom” condition, with few exceptions.
- If after you drive the vehicle, you decide you don’t like it, or if you can’t make the payments, it may cost you more in early termination fees and you might pay an amount equal to the entire original lease term and it may be all at once.
- At turn-in at the end of the leasing term, other fees may be required.
- Items like tires and other expendable items are your responsibility and in higher-end vehicles, they will cost more.
Before you decide on whether to lease or buy your new vehicle, be sure you carefully consider the terms of your contract so that your payments will fit within your budget. If you have questions, speak to our finance team, so that you can make your most informed decision. Contact Premier Chevrolet of Carlsbad with any questions you have for either option today.