Buying vs Leasing a Car: What’s the Difference?
Jack Ingram Nissan put together some information about the differences between buying and leasing to help you make a confident, informed decision about your next vehicle purchase. If you choose to buy a car, you pay for the entire value of a vehicle, regardless of how long you keep it or how many miles you put on it. If you choose to lease a car, on the other hand, you only pay for a portion of a vehicle’s total value, which is the portion that you use during the time you’re driving it. In other words, you’re paying for the vehicle’s depreciation throughout the lease term.
The biggest difference between buying and leasing a car is ownership. Buying a vehicle gives you complete ownership to do what you want with it, while leasing a vehicle only gives you temporary ownership with restrictions on what you can do with it. If you wish you customize your vehicle, or think it will undergo excessive wear and tear, buying is a better option. Another advantage of buying a vehicle is the freedom to sell or trade it anytime—a lease term has early-termination charges if you end the lease early. Other key differences are outlined below.
|Cash price or a down payment, taxes, registration, and other fees.||Upfront Costs||First month’s payment, refundable security deposit, down payment, taxes, registration, and other fees.|
|Usually higher than lease payments, since you are paying off the entire purchase price of the vehicle.||Monthly Payments||Almost always lower than lease payments, since you are only paying for the vehicle’s depreciation during the term.|
|You have no restrictions on how many miles you can drive your new vehicle.||Mileage||Most leases limit the mileage to 10,000 miles per year. You will have to pay charges for exceeding the limit.|
|At the end of the loan term, the vehicle is paid off. You can sell or trade in your car when you want a different one.||End of Term/Vehicle Return||At the end of the lease term (typically two to four years), you can return the vehicle and lease or purchase a new one.|
Should I Buy or Lease a Car at Jack Ingram Nissan?
What’s the best option for financing your next car? This question does not have a quick answer, since there are so many factors involved. However, as a general rule, consider your lifestyle, needs, and preferences when making this decision. Simply put, leasing allows you to get more car for less money, since you only pay for the value of the vehicle that you drive instead of paying for the entire value of the vehicle. On the other hand, buying gives you the freedom of complete ownership and the ability to pay off the vehicle and build up credit when it comes time to buy a new one. Ultimately, it is up to you to weigh the pros and cons of both financing options and determine which method best fits your needs and suits your lifestyle.