When it comes to leasing a vehicle versus buying, so many people don’t know the difference. The choice is often such a tough call, that you have no idea if you have made the right one for you. East Hills Subaru wants to help you understand the difference between buying a vehicle and leasing one out through a dealership.
Buying a vehicle will have higher monthly costs, but you will own it in the end. Leasing a vehicle has lower monthly payments, but you will get into a cycle where you will never stop paying for the vehicle. More people are choosing to lease more than buy these days. I don’t think that the trend is going to stop anytime soon, but let’s take a look at the differences.
Ownership of the Vehicle
Lease: You do not own the vehicle and have to return it at the end of the lease cycle. That is unless you decide to buy it and pay off what the last payment would.
Buy: You own this vehicle and get to keep it as long as you want.
Lease: They can include the first month’s payment, a refundable security deposit, an acquisition fee, a down payment, taxes, registration, and other fees.
Buy: They include the cash price or a down payment, taxes, registration, and other fees.
Lease: Lease payments are almost always lower than loan payments because you’re paying only for the vehicle’s depreciation during the time of the lease.
Buy: Loan payments are usually higher than lease payments. This is because you are paying off the entire purchase price of the vehicle.
Lease: If you end the lease early, those fees may make it better for you just to stick with your contract.
Buy: You can sell or trade this vehicle at any time. If need be, the money from the sale can pay off whatever is left on the loan balance.
Returning the Vehicle
Lease: You return the vehicle when the lease is over and pay any end of lease costs. You can then just walk away.
Buy: You will have to sell or trade the vehicle when you decide that you want something different.
Mileage on the Vehicle
Lease: Leases will have a certain amount per year you can drive. If you go over that, you will be assessed fees.
Buy: You can drive as many miles as you would like. Keep in mind though that the more miles, the more the vehicle value goes down.
Wear and Tear
Lease: You are responsible for wear and tear. You will be responsible for anything in excess of what is considered normal.
Buy: You do not have to worry about the wear and tear. Keep mind that more wear and tear brings the value down.
Lease: You can modify the vehicle but must remove anything when the lease term is up. If there is any residual damage to the vehicle you will have to pay fines.
Buy: You can modify the vehicle as you want. Keep in mind however that some modifications will void out your warranty.
As you can see depending on your situation, one or the other may look more appealing. If you do not want to ultimately own the vehicle, than leasing may be more your route. If you want a little more freedom with how you use the vehicle, then buying may be more your way to go. Ultimately, the choice is up to you and what is in your best interest.