You want to buy a new car; so you search the Internet, look at the latest car ads in the newspaper and check out the TV commercials from local car dealers. You choose the color, make, model, and options you want. You narrow down your choices, and now it's time to head out to the dealership. But have you asked yourself this one critical question: Should I buy or lease my new vehicle?
How you finance your new car purchase is no doubt the most important decision you will make. This decision not only affects how much you will be paying for the car each month, but other factors, like equity, mileage caps, residual value, and even how you customize your new ride.
At Fredonia Chrysler Dodge Jeep Ram, your hometown Chrysler Dodge Jeep Ram dealer in Fredonia, New York, we want to help you understand your choices when it comes to financing your new car purchase. Your financing choice will depend on your lifestyle, your budget, and how you intend to use your vehicle. We want to empower you to make the best decision for your individual needs.
For this reason, we put together the following information describing the difference between leasing and buying a new car. There are benefits and drawbacks to each financing option. You should consider the option that works best for you. Our finance specialists here at our Chrysler Dodge Jeep Ram dealership can walk you through this process to help you make the right choice for you.
Why Buying A Car May Be Right For You
When you buy a car, once you pay it off you own it. It's yours. You can keep it for as long as you want to, or use it as a trade-in to buy another car. You can also customize your vehicle to suit your personal tastes.
Another benefit of buying a car is that you don't have to worry about any potential damage. If you have kids, for instance, they may wreak havoc on your car's interior. Or, you may get your car scratched or dinged up in a parking lot.
With a lease, however, you must return the vehicle in good condition, minus normal wear and tear. You may be on the hook for additional reconditioning costs of you return the car in less than perfect condition.
Financing a car purchase is different than leasing. First of all, you will sign a loan contract for the agreed-upon purchase price of the car, plus any taxes, fees, or other charges. Your loan payments may be higher because you are financing the entire price of the car. Also, the bank or lending institution may require you to come up with a down payment to reduce the loan amount.
You will also, over time, build up equity in the new vehicle if you buy it. If you lease a vehicle, you are basically renting it. You must return it when the lease is up and either get another car or arrange to purchase it for the remaining amount owed on the lease. If you really love your car and want to keep it, then leasing may not be a good option.
Another benefit of buying a car is that you don't have to worry about how much you drive it. Leases cap the mileage you can drive in a year. If you go over the allotted mileage, you will be charged for the excess miles driven. Of course, the more miles you put on your car does affect its resale value in the long run.
Why Leasing Could Be The Best Choice For You
If you are someone who loves that new car smell every couple of years, you may want to consider leasing your next car. Some of the most common leases are for three years or 36,000 miles. So you can get a brand-new car with all the latest technological innovations and styling to suit your time frame.
Since you are paying to use your new car for a set period and then returning it for the dealership, you do not build up any equity in the vehicle. However, when you buy a car, it loses value from the day you purchase it. You don't have to worry about your car depreciating when you lease it.
If you don't like worrying about trading in your car and haggling over how much the dealership will give you for it, the nice thing about leasing is that you can walk into the dealership, return the car in good condition, pay any end-of-lease costs, and walk away from it. You are then free to buy or lease another vehicle of your choice. You can also arrange to buy the car by paying off the remainder of the lease.
You should also note that lease payments are almost always lower than loan payments. The reason is that you are only paying the difference between what the car's sticker price is and what its anticipated residual value will be at the end of the lease term.
Here is how this works: Let's say that the MSRP of your new car is $25,000 and you decide on a three-year lease. We'll assume that the theoretical residual value of your vehicle is 60% of the original purchase price. That means this particular vehicle would be worth around $15,000 at the end of the lease. Your monthly payments would, therefore, be calculated on the remaining $10,000 instead of the full $25,000. What this means is that you may be able to buy a lot more car for the money.
You can also take advantage of special leasing deals that often require no money down and no first month's payments, or other incentives. Keep your eye peeled for these special lease incentives that we offer here at Fredonia Chrysler Dodge Jeep Ram.
Make The Right Choice At Fredonia Chrysler Dodge Jeep Ram
We hope that understanding the difference between leasing and buying a new car will help you make the right car-buying decision for yourself and your family. Regardless of whether you choose to lease or buy your next car from us, we will make the process easy and hassle-free. At our Fredonia Chrysler Dodge Jeep Ram dealership, we take the time to explain your options and guide you through the process every step of the way.
We have an extensive selection of new 2015 Chryslers, Dodges, Jeeps, and Ram trucks from which to choose. And now is the time to take advantage of special money-saving incentives. Come by our showroom at 258 W Main St, Fredonia, New York or give us a call at (716) 673-1371 for great deals on the best new and used cars for sale in the Buffalo area.
Sources:
http://www.consumerreports.org/cro/2012/12/buying-vs-leasing-basics/index.htm
http://usnews.rankingsandreviews.com/cars-trucks/Buying_vs_Leasing/