Buying Vs. Leasing
Buy Vs. Lease
So, you’re in the market for a new vehicle and you’re not sure whether you want to buy or lease. If you’re like most, you’ve received all of the advice you want and then some on which option is better. The truth is, both buying and leasing can be good options, depending on your priorities and a number of other factors – not the least of which is the type of vehicle you are planning to buy or lease. Of course, you want to go into the car shopping process open-eyed and it’s always important to fully understand the terms of any purchase or lease.
Buying and Leasing Defined
For starters, let’s look at what buying and leasing are – what’s similar and what’s different.
- Buying When you buy a car, you’re doing exactly that. You’re purchasing the car. You pay the full price of the car and the car ends up being yours. If you’re like most car buyers, you’ll take out a loan, at which time you (and the lending institution) will own the car. Once you’ve paid off the loan, you will have a clear title and the car is yours forever – or at least until you sell it, trade it in on another vehicle or otherwise assign ownership to someone else.
- Leasing When you lease a can, you are buying the use of the car for the period of time and for the amount of mileage specified in the lease. In most cases, you will make a down payment followed by monthly payments, much as you would do if you were buying the car. The difference is that instead of paying for the full price of the car, you are paying for the difference between the initial price of the car and the car’s projected value (what lenders believe the car will be worth) at the end of the lease term.
So, What are the Advantages to a Lease?
Generally, when you lease a car, your payments will be significantly lower. This is because you are only financing a portion of the car’s total price. At the end of the lease, you return the car to the dealership, which is generally resold as a used car. Or, you can choose to purchase the car if you prefer. In fact, the purchase price of the car is written into the lease, allowing you to know how much the car will cost you well ahead of time. Leasing is an attractive option for those who want to keep themselves in a newer model car without paying the higher price and monthly payments that buying would require. In addition to having to spend less on your monthly car payment, a lease is an attractive option for many because:
- The car is generally under warrantee for the duration of the lease
- Driving a late model, low mileage vehicle generally equates to low maintenance costs (typically, maintenance costs are limited to oil changes and tire rotation)
- In many cases, particularly in the case of people using their vehicle for business, leasing presents significant tax advantages because the lease can be written off as a tax deduction
- You don’t need to worry about how well the vehicle will hold its value. Some cars end up retaining their value better than others in the used car market. If you’re leasing, you don’t need to worry about your vehicle taking a nose dive in value because you have the option of turning it back in at the end of the lease and walking away.
The major disadvantage of leasing is that you don’t own the vehicle at the end of the lease. This allows you to stay in newer vehicles at a manageable price, but it also means that you never have a vehicle that you can truly call your own. You also need to be particularly careful with the way you take care of a leased vehicle, lest you have to pay for damages when you turn the car in.
Buying/Ownership has its Advantages, Too
While leasing is an attractive option for many, buying has its advantages, too. The biggest one is that you end up owning the vehicle outright. It’s yours to do with as you wish once you have it paid off. Beyond that, some of the advantages to ownership include:
- Ability to make modifications. Want to add a spoiler? Paint racing stripes on the car? Make some tweaks to the engine? If you’re buying the car, you can do that. Making modifications to a leased car may violate the terms of the lease.
- Unlimited driving. If you’re buying a vehicle, you can put as many miles on it as you want. Leases have limits to the mileage and if you go over the limits, you have to pay for the overage (and it can add up to a lot of money if you go over by much).
- Fewer worries about damage. Of course, you want to keep your car nice, but if you damage the upholstery (or anything else) on a vehicle you’re buying, you don’t need to worry about paying extra for it. You can choose to have the problem fixed or you can decide it isn’t worth paying for and live with it if you choose.
Of course, along with the advantages of buying a car, there are some drawbacks. Once the warrantee has expired, you will need to pay for repairs yourself. The car may or may not hold its value well, meaning you could end up with a car that won’t give back much in the way of trade-in value. You will also need to assume higher maintenance costs, paying for things such as new tires and brakes (things that wouldn’t wear out during the duration of a typical lease).
So, Which is Better – Buy or Lease?
Each person has to look at the numbers carefully, look at their own goals and priorities carefully and make a decision for themselves regarding whether buying or leasing is a better option for them. Do you want to keep payments low but continually drive a late model car? Leasing is a good option. Do you want or need to be able to put a lot of miles on a vehicle? Buying is likely your better choice. Is it more important to you to stay in a late model vehicle or to end up having a vehicle that you can truly call your own?
One additional note: Leases can vary widely depending on the make and model of the car and the lending institution’s evaluation of that car’s likely value at the end of the lease. Makes that have been around a long time and have a strong track record of having a high resale value generally afford the opportunity for better lease terms than new makes or makes that have a poor track record of maintaining value. So, if you’re considering a lease, it makes good sense to look at leases for several different vehicles to see which is offering you the best deal.
Buy or Lease, Your Best Deals are at Woodmen Nissan
Nissans have a strong track record for retaining their value. Consequently, you can generally get a very attractive lease on most Nissan vehicles. Whether you buy or lease, though, you can count on Woodmen Nissan to help you get the best deals on the best new cars, trucks and SUVs on the market. Come down to Woodmen Nissan to discuss leasing and buying agents with our professional, courteous sales staff today.