Leasing vs Buying
Pros and cons of buying vs. leasing a car
At Northtown Automotive in Amherst, NY, we are committed to providing our valued customers in Buffalo and Williamsville NY with an incredible variety of automotive choices. By the same token, we are just as committed to providing our customers the flexible choices they need in financing. While most people find that buying a new car with an auto loan is the best route, leasing is also an option. Let's do a comparison of the two.
Some key advantages of getting an auto loan
One reason so many people finance with an auto loan is because it comes with so many advantages. For example, with a car loan, you're building up cash value in the car you're buying. It's like having a savings account inside the car itself and the money has your name on it. As you make your payments each month, you gain a greater and greater share of ownership in the vehicle. That's money you can use some day to buy your next car.
Other advantages of buying with a car loan
With a car loan, you actually own the car outright. You have no more monthly payments and you can drive the car as long as you want, payment-free. When your payments are done, you can sell the vehicle because you own it, or you can trade it in on a new one. In addition, you can drive as many miles as you want every year without a penalty. None of these advantages are available to you when you lease a car so a loan is usually a better deal.
Some of the challenges involved in a car loan
A car loan requires that you come up with a down payment in the beginning. The ideal car loan down payment is 20% of the selling price. In addition, the monthly payment that you make with a car loan is nearly always higher than the monthly payment you'd be making with a lease. That means you won't have as much money every month for other purchases. Any car loan requires you to pay interest and the interest is usually not tax-deductible.
Advantages of leasing a car
Perhaps the biggest attraction of leasing is that your monthly payments will be lower than monthly payments with a car loan. In addition, a lease requires less money up front for the amount due at signing. Leasing is an easy way to get a new car and all the latest features and new designs every few years. At the end of your lease, you don't have to worry about re-selling that vehicle because you don't own it but you do have the option of buying it.
Some key disadvantages in leasing a car
When you come to the end of your car lease, you don't have a nickel's worth of ownership in the car you've been leasing. A lease is really like renting the vehicle: You don't build up any ownership share so when your lease is over, you have to start all over again. You have a limit on the number of miles you can drive each year without a penalty and you also have to pay for any excess wear and tear at the end of your lease.
Talk to our finance experts to find out more
This is just a summary regarding a loan vs. a lease. Our financing specials can help you save either way. Talk with one of the friendly, knowledgeable specialists in our finance center about which form of financing would work best for you. We invite you to browse our new inventory to find a vehicle you like and then contact us to schedule a test drive at Northtown Automotive in Amherst NY.
