Should You Lease or Finance a New Car? Langley Experts Weigh In
Speed is one of the biggest obsessions of our century. Almost everything happens either on fast forward or in real-time. In this day and age, those who snooze, truly lose.
So, it’s not an exaggeration to say that having a car is a necessity. But, for most people, purchasing a car is one of the biggest investments they’ll ever make. Therefore, they need to ensure that it will serve their needs since they can’t return it after 30 days of driving when they realize that they prefer to commute to work.
So, it’s worth asking yourself: should you lease or finance your new car?
Fortunately, Langley dealers can help you get to the bottom of that by weighing in with a few tips and tricks of the trade.
Buying Comes with the Advantage of Ownership
When it comes to purchasing a car, you have two main options – outright buying it or leasing it. One isn’t better than the other, and depending on some factors, each can be a suitable solution for you and your family.
Buying a car is probably the most common option since most people tend to view cars as lifelong investments, or at least long-term ones. If you acquire a loan to be able to buy the car of your dreams, the second it is paid off, the vehicle becomes your property. You don’t need to worry about other payments, except, of course, the repair and maintenance costs.
Sure, down payments can get pretty pricey, and the monthly loan payments can be difficult to meet with at times. But, all these efforts are worthwhile considering that, in the end, you will be the sole owner of the car. And as an added benefit, you don’t have to worry about any mileage restrictions.
Leasing Can Make More Economic Sense
Leasing is very similar to financing, but with a few key differences that give this option its particular benefits. For example, when you make a loan to buy a car, the loan’s value will be based on the actual cost of the car, deducting the down payment and trade-in value. Leasing a car, however, means that you’re simply paying for the depreciation of the car during the agreed-upon period (which is usually three years), plus fees.
That means that in most cases, a vehicle lease payment will end up being cheaper than a loan payment since you’re essentially paying for the car’s price minus its estimated worth at the end of the lease (the residual value).
Another benefit of leasing is that it usually doesn’t require a huge down payment. Typically, when purchasing and financing a vehicle, you’re required to pay at least 10% of the price up front, if you want to get a good interest rate on your loan. However, even 10% of the price of a car can be a price that some people can’t afford. So, if you don’t have a lot of money saved up for a down payment, then leasing could be a better option for you.
With Leasing, You Can Purchase the Newest Cars Available
Leasing is an excellent option if you want to purchase the newest cars with the latest features, but don’t exactly have the financial possibility to do so, or you don’t want to pay up front for it since you know you’ll look for the next best thing in a few years. Leasing allows you to enjoy the benefits a nice car has to offer until you decide to switch it with a new one.
Leasing Comes with a Warranty
During a lease, the vehicle is usually covered under warranty for any unexpected repairs that may occur. However, you are still expected to take care of maintenance, such as oil changes or tire rotations. Maintenance is also extremely important because, if not done right, it can result in some pretty hefty fees at the end of the lease. So, keep in mind that you’ll have to pay for any dents or tears in the leather or fabric of the car when you return it.
Leasing drawbacks include a strict limit of the number of miles you can drive with your new car. For example, most drivers usually run a car for up to 12,000 miles per year, but leasing mileage restrictions can range from 9,000 to 15,000. You’ll need to carefully estimate how much you drive and prepare to pay some hefty fees if you exceed that limit.
All in all, according to Langley experts, leasing might be more beneficial. Before you make a decision, make sure to consider your needs, analyze the pros and cons of each option, and determine your budget.