Courtesy Ford Sauk Prairie

Buying vs Leasing | Sauk City, WI

Buying vs Leasing - Courtesy Ford - Sauk City, WI

If you’re in the market for a new car, there are two options when it comes time to make a purchase: buying and leasing. Both have their benefits and work best for different types of financial situations. Each option has its pros and cons. Despite the vehement arguments on both sides, whether you buy or lease depends on your financial situation and needs. Here’s the gist of buying versus leasing so you can make the choice that fits your finances!

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Pros and Cons of Buying a New Car

 

Benefits of Buying a New Car

·         Long Term ownership

·         Large return on investment

·         Once paid off, you own it

·         No mileage restrictions

·         Able to customize

 

Drawbacks of Buying a New Car

·         Larger monthly payments, unless        spread out over longer time

·         Bigger down payments

·         Unpredictable resale value

·         More maintenance fees

 

Pros and Cons of Leasing a New Car

 

Benefits of Leasing a New Car
 

·         Lower down payment

·         Based on percentage of new car         price

·         Typically a Warranty throughout          lease

·         Less maintenance costs

·         No trade-in hassle

 

Drawbacks of Leasing a New Car
 

·         Mileage limitations

·         Early lease termination fees

·         No alterations or modifications to          the vehicle

·         Similar to renting a car, not            

          building equity

·         You don’t 'own' the car

 

                           

 

      

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Finance Department - Sauk City, WI

Buying is taking out a loan to pay the full amount of the car. Once it’s paid off, it’s yours for good to do as you wish. You can modify, spill things, smoke, and drive as much as you want. Making payments also earns you equity in your vehicle. Once you own it, there’s no more payments.

Buying is a great option if you want a long-term investment. Sure, initial payments are higher, but if you plan on keeping your car for years to come, you’ll eventually pay it off. If you have good credit, you should definitely consider buying—you can get whatever kind of loan term you like and work on getting a good monthly payment and interest rate.

Drawbacks include a hefty down payment, long loan terms, and an unknown resale value.

Leases, on the other hand, don’t require a hefty down payment and have short term contracts (usually about three years). The amount you pay is based on a pre-determined resale price at the end of the contract period. During the contract, the car is often covered under a full warranty so all repairs aren’t out of your pocket.

Budget drivers often choose leasing because the monthly payments are lower, but this isn’t the only great reason to lease. Leasing opens you up to switching vehicles once every few years, which means you’re always getting new cars with the latest technologies and features. Plus, since monthly payments are lower, you can get a better car than you could if you financed.

Drawbacks to leasing a vehicle are lack of equity, mileage restrictions, modification restrictions, and possible overage charges at the end of the contract. Keeping it under a certain mileage can be tough for frequent travelers. This isn’t a problem with financed cars, which are yours to do with what you want. Plus, you have a little more flexibility with a financed car since you can trade it in at any time. On the other hand, repair costs are cheaper for leased cars because they’re always under a factory warranty.

Buying or leasing can be a tough decision, so if you want some help deciding what’s right for you, ask our talented sales team at Courtesy Ford of Sauk City!