Best Buy For Your Buick: Financing Vs. Leasing

September 27th, 2022 by

Best Buy For Your Buick: Financing Vs. Leasing

Key Takeaways:

  • The most significant advantage of buying a car on lease is that you’re only responsible for any damage beyond the wear and tear specified in your lease contract.
  • Suppose you choose to buy the vehicle after the lease term. You’ll have to pay the ” balloon payment,” which is the difference between the car’s value at the beginning of the lease and its current market value.
  • However, buying a car with financing means that you’ll own the vehicle outright once you’ve made your final loan repayment
  • Financing may be the ideal option if you plan to keep your car for a long time and don’t mind making monthly payments.
  • Leasing may be a better choice if you’re not sure how long you’ll keep the car or if you want lower monthly payments.

Purchasing a vehicle is a significant decision, so you’ll want to know all your options before signing any documentation.

Determining a budget and the make and model of the vehicle is a serious consideration. Then you’ll also have to decide which optional features you want and whether you wish to extend the warranty service plan for any reassurance.

Once you’ve decided on all these factors, it’s time to figure out how you’ll be paying for your next car. Financing vs. leasing is a hot debate when it comes to car ownership. However, both options have their upsides and downsides. Depending on your financial condition, you’ll want to determine where you’d like to be financing a car or buying a car on lease.

Let’s discuss the differences between financing vs. leasing in further detail to help you make an educated decision.

Financing Vs. Leasing A Car Explained

For instance, buying a car on lease is similar to paying rent for your house. You can drive the vehicle of your choice with lower monthly payments than financing the car’s entire cost.

The dealership or the leasing company technically owns the leased car. You’re paying to use it over a certain period, typically two to four years.

The most significant advantage of buying a car on lease is that you’re only responsible for any damage beyond the wear and tear specified in your lease contract. You don’t have to worry about sudden repair costs eating into your budget.

However, there are also some caveats to leasing a car. You won’t own the vehicle outright even after making all your lease payments. Your mileage and modification capabilities will be restricted. Breaking your lease before the time can also be costly.

Financing a car, however, means taking out a loan to pay for the vehicle in full. You’ll then have to make monthly loan repayments until the debt is paid off.

One advantage of buying a car with financing is that you own the vehicle outright once you’ve made your final loan repayment.

However, there are also some drawbacks to financing. For one, you’ll likely have to pay interest on your loan, which will add to the overall cost of the vehicle. You may also be required to make large down payment upfront.

Moreover, leasing a car comes with various restrictions. For instance, you may be limited in how many miles you can drive per year. You’ll also need to take good care of the vehicle since you’ll be responsible for any damage at the end of the lease.

On the other hand, financing also helps you build equity in a vehicle, which you can later use as collateral for other loans or lines of credit.

Financing Vs. Leasing A Car Explained

Buying A Car on Lease: The Drawbacks

The main disadvantage of buying a car on lease is that you never actually own the vehicle. You’re merely paying to use it for a set time. You’ll have to return the car to the dealership at the end of your lease unless you buy it outright.

Suppose you decide to purchase the vehicle at the end of the lease term. In that case, you’ll still have to pay the ” balloon payment,” which is the difference between the car’s value at the beginning of the lease and its current market value.

Another downside of leasing is that you may have to pay fees if you exceed your mileage limit or if there’s significant wear and tear on the car.

Since you don’t own the car you leased, you can only drive it for a limited number of miles per year. The limit is generally around 10,000 to 15,000 miles per year. If you exceed this limit, you’ll have to owe an average cost at the end of the lease term.

Moreover, if you’re someone who likes to personalize their car with various aftermarket customizations, the lease doesn’t allow that.

Buying A Car on Lease: The Benefits

The main benefit of buying a car on lease is that you can get a new car every few years without dealing with the hassle of selling your old one.

Another benefit is that leasing generally requires a lower down payment than buying a car outright. That can be helpful if you don’t have much money saved up for a down payment.

Since the manufacturer’s warranty typically covers leased cars, you may also not have to worry about unexpected repair costs during the lease term.

Moreover, leasing a car allows you to lease another more advanced vehicle that you wouldn’t be able to afford with financing.

Financing A Car: The Drawbacks

There are various reasons why the debate between financing vs. leasing a car is hot. The options have differences that make each unique according to your needs.

However, the first significant downside of financing is that you will have to pay the total purchase price of the vehicle. This means that, unless you can get a 0% APR loan, you’ll likely be paying interest on your car loan.

Another drawback is that you will be responsible for all maintenance and repairs since you own the vehicle outright. This can be costly, especially if something goes wrong with the car.

Finally, once you have paid off your car loan, you are free to sell or trade-in your car. However, you may not make much money from the sale if you’ve managed to keep your vehicle in good condition and it’s gone up in value.

Financing A Car: The Benefits

One of the main benefits of financing a car is that you will fully own the vehicle from the start. This means you can do anything you choose with the car.

Another advantage is that if you keep your car for a long time and take good care of it, you may be able to sell it for more than you paid for it. This can give you some financial leeway when buying your next car.

Finally, if you finance a car, you may get a lower interest rate than if you lease. This could save you money over the long term.

Want to know more about the advantages and disadvantages of a pre-owned car? Here’s an article you should read.

Auto Financing Vs. Leasing: Which Option Suits You?

The answer will solely depend on your circumstances. Financing may be your best option if you keep your car for a long time and don’t mind making monthly payments. On the other hand, leasing may be a better choice if you’re not sure how long you’ll keep the car or if you want lower monthly payments.

Do some research and determine which option makes the most sense. There’s no right or wrong answer – it all comes down to what works best for your lifestyle and budget.

Jack Hanania Buick GMC offers a vast inventory of new and pre-owned vehicles for buyers looking to own a car in Jacksonville, FL. Browse through our inventory and let us help you finance the best car according to your needs. Visit us today!

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