When it comes to getting behind the wheel of a new car, there are two financing options: buying and leasing. Each option has its benefits and drawbacks but one may be better than the other dependent on your financial situation. Take a look at the benefits and drawbacks of buying and leasing and see which financial option works best for you!
When buying a vehicle, there’s no ands, ifs, or buts about it. You own the vehicle once your loan is paid off. That means you’re free to modify it, drive it as much as you want, or destroy it if you really want to. Buying a vehicle also builds equity to help you pay for your next vehicle.
On the downside, buying a vehicle usually requires a higher down payment. Monthly payments are usually higher as well as you’re paying off the entire value of the car. Once the warranty is up, all repairs come out of your pocket. Selling the vehicle in the future is also your responsibility.
A lease is essentially a long-term rental. You pay the difference between the new car value and the car’s predetermined value at the end of the lease. That can lead to lower monthly payments. You aren’t responsible for selling the vehicle at the end of the lease and a warranty will likely last the duration of the contract.
Several drawbacks to leasing a car include limits on how much you can drive, what modifications you can make, and you aren’t building any equity. While you can buy the car the end of the lease, doing so could cost you more than the car is worth.
For more information on whether buying or leasing is the right option for you, feel free to contact Floyd Traylor Honda today. Our friendly finance department is always here to help.