Buying vs Leasing

There is a lot of hype surrounding the option of leasing a new car these days. Every dealer advertises specials for “well qualified lessees,” but this option isn’t for everyone. On the flipside, buying a new car is a huge investment. It’s important to know what you want out of the vehicle before you commit to buying something of that magnitude. As with the lease option, buying is also not for everyone. There are pros and cons dealing with each option.

Buying

When you buy a vehicle outright or finance it through a bank loan, which most people do, you own it. From the time you sign the paperwork and the keys are handed to you, you own that car as long as you fulfill the obligations the lender requires.

Financing a car also requires a down payment. Sometimes, if you have a vehicle for trade, this will be enough. The amount of the down payment depends on your credit score and any other factors the lender decides on. If you maintain your vehicle well, you can eventually resell it at a decent value. Once you have completed all of the mandatory payments and obligations, the car is yours fair and square. The bank or other financial institution who held the title for you will send you a Lien Release which is proof the car is yours.

Leasing

When you lease a vehicle from a dealership, you never own the car and you never will. You are actually just paying to use the vehicle for a specific number of months at a set rate. Doing this can actually save you money each month if the rates are right at the time. There is no future value in this option since you never own it. If you exceed the mileage limits during your lease or return it with higher than normal wear and tear, you could owe extra money when you return it. Leasing is essentially the same as renting, just for longer periods and for lower rates.

Occasionally, people get to the end of the lease and have loved the vehicle so much that they want to purchase it. Others just return it and start on another, newer make and model. This way, they always have the safest and most tech savvy cars on the road.

If you are not sure which option is best for you, come in to SouthTowne Motors and we will be more than happy to help you. We have several brands including Chevrolet and Buick!

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