Buying or leasing, which to choose?
Leasing your next new car or truck is a great option to consider instead of buying, but I’ve found that a lot of customers aren’t really sure of the differences between the two. Buying a car is pretty straightforward; you make payments on a vehicle that you want to own, and when you’re done with the payments, the car or truck is all yours.
Now, with a lease, it’s still easy to understand if you know how it works. When you lease, you are mainly paying for the depreciation of the vehicle, which is the difference between the capitalized cost (the purchase price, taxes, fees, and anything else you include into the lease) and the residual value (the estimated wholesale value of the vehicle when the lease is up) of the vehicle. If you opt for higher residuals it means you can get a lower monthly payment, but if you want to keep the car or truck at the end of the lease, it could end up costing you more money. But, since you’re only paying for the depreciation and not the vehicle itself, you can usually get more car for less money per month.
One benefit of leasing is that you can a drive newer-model car or truck, and when the lease is up, get another newer vehicle. This also helps with repair costs when you have a newer vehicle, and a good tip would be to make sure that the lease term doesn’t extend past the manufacturer’s warranty.
Leasing really is a great option that you should consider when shopping for a new car or truck, and with more manufacturers offering lease-specific incentives, it could wind up saving you big bucks. If you have any questions on leasing vs. buying, feel free to comment below!
